A new report shows that activity in the service sector of the economy fell at a record rate last month as new business slumped.
The NCB Services Purchasing Managers' Index (PMI) fell from 41.4 in July to 39.8, the lowest since the survey started in 2000. Any figure below 50 means activity fell.
The index has been falling since February. NCB economist Brian Devine said new orders had fallen sharply due to the slowdown in construction and the credit crunch.
The employment index fell to a record low of 42.2 as firms cut costs in the face of weaker activity.
Firms' costs again rose sharply, but the rate of inflation was the slowest since February. Prices charged by companies for their services fell, however, due to weaker demand and competitive pressures.
Euro zone services also shrank
A similar survey showed that the euro zone's service sector shrank in August. The Markit Eurozone Services Purchasing Managers Index rose to 48.5 in August from July's five-year low of 48.3, slightly better than economists had expected.
Only Germany among the big four euro zone economies remained in growth territory, and its index took a sharp fall in August to 51.4 from 53.1.
The employment sub-index of the services PMI was revised down to 48.9 from an earlier 49.2 estimate, hitting its lowest since February 2004 and showing jobs being lost faster than new posts are being created in the sector.
But there were some signs of relief from rising price pressures. The prices charged component eased to 52.7, well down on the 54.5 July level.
