Growth in the country's services sector hit a four month high in September as companies reported greater activity among customers, resulting in new order growth and rising output. 

The latest Investec Services PMI index showed a reading of 58.7 in September, up from August's 58.4 reading. A figure of over 50 signals growth in the sector.

The index covers the Business Services, Financial Services, Transport and Leisure and Technology, Media and Telecommunications sectors. 

Investec Ireland's chief economist Philip O'Sullivan noted that new business orders extended the run of above-50 readings to 62 months, both from at home and abroad.

"The New Export Business component reveals substantial growth, part-driven by higher demand from the UK (in contrast to the findings of the Manufacturing PMI earlier this week), with the rate of increase in overseas demand quickening to the fastest since February," the economist added.

To deal with the extra demand, firms took on extra staff during the month, which helped the Employment component of the index continue a sequence of above-50 readings that started in September 2012.

Meanwhile almost three-fifths of companies surveyed expect to see a rise in activity over the coming year, while a low single digit percentage anticipate a decline.

Firms in the Technology, Media and Telecommunications sectors are the most confident, Investec noted.

The third quarter of 2017 also saw a solid improvement in profitability at service companies. Firms said that higher new business volumes helped support growth of profits, which increased in spite of higher input costs.