The country's services sector contracted for the second successive month in October but at a softer pace than in September as the country struggles with a second wave of Covid-19, a survey showed today. 

The AIB IHS Markit Purchasing Managers' Index (PMI) for services stood at 48.3 in October.

This was below the 50 mark that separates expansion from contraction but an improvement on the previous month when the reading was 45.8. 

Curbs to slow the spread of the virus were tightened last month when indoor restaurant and bar service was banned in Dublin. 

In late October, as infection rates continued to rise, the Government extended the restrictions to the entire country, shutting non-essential retail and telling people not to travel more than five kilometres from their home.

AIB said business expectations moderated to the weakest level in five months, reflecting anxiety about the impact of the pandemic and the potential for economic disruption if the UK fails to reach a trade deal with the European Union. 

"The re-imposition of restrictions on activity is being most clearly felt in services sectors that depend on discretionary consumer spending," AIB's chief economist Oliver Mangan said. 

"In particular, the transport, tourism and leisure sector posted another very weak reading for October," the economist said.

Oliver Mangan said that while the 12-month outlook for the sector remained positive, business conditions could be even more challenging in November, with much of the sector now back in lockdown.