Activity in the country's services sector shrank and cut jobs at a slightly faster pace in September, the latest figures show.
The NCB Services Purchasing Managers' Index fell to 45.5 from 46.7 in August, edging further away from the 50 mark that separates growth from contraction.
Three of the monitored sectors - business services; technology, media and telecoms; and transport, travel, tourism and leisure - reported falling activity during the month, while financial services recorded a modest rise.
However, a pick-up in key sub-indices pointed to the prospect of recovery from late 2009, NCB said.
The sub-index measuring confidence rose to its strongest since March 2008 while the new export orders component rose to 54 from 49.9 in August, ending a 20-month period of decline.
NCB said that positive sentiment was mainly based on an expectation that economic conditions will improve over the coming year, providing a boost for new orders.
The survey also reveals that although the rate of decline in new business eased again last month, the decline was still marked, with companies remaining cautious when making purchasing decisions.
As spare capacity remained an issued for firms, they further reduced staff numbers in response. NCB said the 19th fall in a row was substantial and broadly the same as in August.
Input costs also fell at services companies in September, mainly due to wage cuts. NCB says the pace of reduction was considerable, despite easing to its weakest since January.
Output charges also fell due to intense pressure from both competitors and customers. Output prices have now failed in each of the last 14 months.
'The fall in the services PMI highlights that domestic demand remains weak but confidence in the sector is improving', commented NCB economist Brian Devine.
'It is encouraging to note that not only is confidence improving but so too is new export business which grew for the first time since December 2007,' he added.
He said he expects the recovery here to take hold in the second quarter of 2009, but said he remains cautious on the outlook for the consumer given the fall in employment, high levels of deb and lower levels of income.
