Growth in the services sector slowed for the second month in a row last month due to weak domestic demand. However, a slight expansion in new export orders kept the sector from contracting.
The NCB Purchasing Managers' Index slipped to 51.1 from 51.7 in July - any reading above 50 signals growth while under 50 signals contraction. NCB said that business confidence fell to its lowest level since November 2010.
The new export orders sub-index rose marginally to 50.4 from 49.6 in July, with increased demand from the Middle East, the UK and the US. But the new orders index, which also includes the domestic market, contracted for the fourth month in a row.
'Exports are once again the main driving force behind the expansion in activity with new export business up,' said Brian Devine, economist at NCB Stockbrokers.
'The familiar two-tiered story is evident again as domestic demand caused new business orders generally to decline despite the rise in export orders,' he added.
The survey reveals that falling workloads resulted in a further modest reduction in employment at services companies, and staffing levels have now fallen in all but one of the last 42 months.
Higher fuel and energy costs were the main reason for a slight increase in input prices last month, while companies continued to lower their output prices due to intense competition and falling demand.
However, the services sector continues to perform better than manufacturing, where activity shrank in August for a third month in a row, according to a PMI survey released last week.
