A survey has delivered a setback to hopes of a recovery in the service sector of the economy, as activity last month fell at its fastest rate since July.
The NCB Services Purchasing Managers' Index recorded 44.4, down from 48.3 in December. Any figure below 50 means activity fell, and the service index has now been below this level for two years.
NCB economist Brian Devine said new orders fell back sharply, indicating that the big fall in activity was not all linked to the cold spell at the start of the month. He said the figures highlighted how fragile domestic demand was in the Irish economy.
The report showed that while new orders fell overall, there was a rise in export orders. Employment levels in the service sector fell, though the drop was the lowest since July 2008.
Business reported that costs fell sharply as they were able to negotiate lower prices with suppliers, but companies also charged less for their services due to intense competition and efforts to stimulate new business.
