The services sector grew again last month, but the pace of growth moderated compared to February, new data showed today.

The NCB services Purchasing Managers' Index for March, which measures activity in the services sector, recorded 51.1, lower than the 55.1 recorded in February but still above the 50 mark that separates expansion from contraction.

New business also grew, but fell to 51.7 from 53.3 a month earlier.

Exports continued to strengthen, but at a weaker pace than previous months. New export orders fell to 52.7 from 56.6 in February, outpacing overall new business.

"New export orders have risen in eighteen of the past nineteen months, with some respondents indicating a focus on external markets," said NCB chief economist Brian Devine.

Confidence in the sector was higher with companies optimistic regarding the prospects for future activity growth. But sentiment showed some sign of slipping, falling slightly to 65.5 in March from 67.3 in the previous month, and was at a weaker level than the long-run series average.

Employment in the services sector fell once more, at 48.3 for the month, the fastest pace in three months.

"Staffing levels in the sector have decreased in each month since March 2008," said Mr Devine. "This remains the key problem for economic growth; the economy needs to break the negative feedback loop between declining services sector employment levels and domestic demand."