The country's services sector expanded sharply in May, easing fears that business activity could moderate amid a global slowdown, a survey showed today. 

AIB's Services Purchasing Managers' Index rose to 57 in May from 54.7 in April, as respondents pointed to improving economic conditions and successful marketing efforts boosting growth of new orders. 

The index has been comfortably above the 50 mark that separates growth from contraction since 2012 but recent weakness saw it fall to a near six-year low in January. 

The services sector covers areas as diverse as communication, financial and business services, IT and the tourism trade. 

Today's index showed that new orders expanded at the fastest rate in five months in May. 

The pace of services expansion was higher than readings from the US and the euro zone, which pointed to "much stronger growth in the Irish economy", according to AIB's chief economist Oliver Mangan. 

"The strong services PMI reading of 57.0 for May is very welcome given that the manufacturing PMI fell to 50.4.

"This suggests that the Irish economy is continuing to expand at a good pace, driven by strong growth in the large services sector," Mr Mangan said.