The country's services sector shrank in June at the slowest pace for more than a year, the latest survey shows.
The NCB Purchasing Managers index found that service companies expressed 'modest' optimism about future prospects for the third time in four months.
The Services PMI index rose to 42.5 in June from 39.5 in May, the highest level since May 2008, with the gauge of business expectations at a nine month high of 54.8,
This was firmly above the 50 mark which separates growth from contraction and up from May's 50.8.
'It is encouraging to note that optimism among service sector firms is gradually improving,' said Brian Devine, economist at NCB Stockbrokers.
'While the economic contraction is undoubtedly going to be severe as the fundamental pressures continue to weigh on the economy, the pace of decline is likely to be less severe going forward as pessimism fades,' he added.
The PMI survey's employment index signalled the 16th successive month when firms shed jobs, a reflection of their declining workloads. However it was also noted that the rate of job shedding in June was the slowest since October 2008.
New orders fell at a weaker pace last month, although the 17th reduction in a row was still considerable, the index reveals. NCB said this was due to weak client demand, as well as reductions in public sector projects.
Input costs fell at a series record pace in June, which extended the current period of reduction to six months.
Companies said that salary reductions as well as successful talks with vendors for discounts were the main reason for the falls.
Increased competition in the service sector was the main cause of June's reduction in output costs. Output prices continued to fall at a considerable pace last month, despite the pace of decline easing to its weakest since January.
