Activity in the services sector slowed further last month, as contractions in new business and employment accelerated, while confidence remained low.
The NCB Services Purchasing Managers index for January fell to 33.9 from 34.1 in December to record its second fastest rate of contraction in the history of the series.
The latest fall also extended the current period of contraction to 12 months.
Service providers were pessimistic regarding further activity levels for the fourth month in a row, as the outlook was more negative than that recorded in December. Most companies taking part in the survey expect the current economic downturn to worsen during the year.
January also saw the third sharpest fall in new business in the PMI's history. Companies were said to be cautious when making purchasing decisions due to the current economic climate.
Jobs in the services sector were cut at a record pace last month, extending the current level of decreasing employment to 11 months. 40% of survey participants indicated reduced staffing levels in January, while just under 3% reported any increases.
January also saw the first experience of input cost deflation since the survey started. This was due to lower wages and reduced fuel costs. The relative weakness of sterling compared to the euro also made some goods from the UK cheaper.
35% of respondents also reported lower output prices in an attempt to boost demand and as a response to increased competition.
