Confidence in the Irish service sector fell to a six-year low in December amid concerns over the slowdown in the construction sector, according to a survey.
According to the NCB Purchasing Managers' Services Index, business activity in the services sector improved on the 52-month low recorded in November.
However, at 53.5, the rate of growth was far less than the average of 59 seen in recent months. The business expectations index fell from the previous month's 70.4 to 62.9.
"While the overall index rose to 53.5 from 52.8 there was a sharp fall in confidence to its lowest level since September 2001," said Eunan King, senior economist at NCB Stockbrokers.
"This would appear to be related to worries about the construction sector and its implications for the wider economy. While we would not share this view, it has received considerable publicity and obviously is influencing expectations."
Job creation, although still showing growth, also slowed a little, with additional hiring to drive expansion plans at some firms offset by outsourcing and natural wastage in others.
Increased competition in some sectors of the service industry slowed growth in output prices, while close to one third of firms said costs had risen, with increasing oil and fuel prices along with staff salaries putting pressure on profitability.
Despite this, the rate of charge inflation slowed to a moderate level, and profitability improved slightly in December when compared to three months earlier.
