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Services sector sees slower rate of expansion in March

NCB Purchasing Managers index for the services sector stood at 52.3 in March
NCB Purchasing Managers index for the services sector stood at 52.3 in March

Activity in the country's services sector expanded in March, but at a slightly slower rate than in February.

The latest NCB Purchasing Managers index for the services sector stood at 52.3 last month. Any figure under 50 signals contraction in the sector, while anything over signals growth.

In January, the services sector had expanded at its fastest rate in over five years.

NCB noted that new export business saw its 20th month of expansion in March, with the pace of growth picking up on February levels.

This in turn drove an increase in new business - the eighth rise in a row.

Today's survey shows that companies in the services sector increased their staffing levels for the seventh month in row - and a solid pace.

However, the pricing environment remains very difficult, NCB said, with higher fuel costs continuing to push up input prices as competitive pressures continue to weight on output prices.

This impacted profits at Irish service providers, which fell again in the first quarter of 2013, NCB said.

NCB chief economist Philip O'Sullivan said that the key positive from the latest PMI is the continued strength in new export business. He noted that services exports were an important contributor to economic growth last year, with total export growth of 2.9% driven entirely by strength in the services sector.

He said it was ''encouraging'' to see that the survey's forward looking index continues to reflect ''solid optimism'' on the part of service providers, with reports that new export business would be a key source of growth over the coming year.