Companies operating in the services sector here recorded another sharp rise in business activity in November, albeit at a slower rate than in October.

This is according to AIB's latest monthly survey of businesses operating in the services industry, known as the Purchasing Managers' Index (PMI).

Reports of rising Covid-19 case numbers weighed slightly on business levels and expectations.

The 12-month outlook was the weakest since March, and workforce growth also slowed.

Inflationary pressures remained strong, the report noted, and described cost pressures in the services sector as remaining 'severe.'

Although input price inflation eased for the first time in seven months, it remained among the fastest registered in the 21-year survey history.

Fuel, wages, energy, transportation and import duties were all highlighted as sources of rising costs.

"Subsequently, the rate of inflation in prices charged by service providers was the fourth-highest on record in November," the report said.

The Services Business Activity Index was down sharply on October's measure.

The 4.2-point drop in the Index was among the largest registered over the survey history, the report stated, outside the double-digit plunges registered in March-April 2020 and January 2021, suggesting a notable moderation in growth.

The 12-month outlook for activity remained strongly positive, but eased to an eight-month low.

"This moderation in the pace of growth was evident across the main sub-components of the survey," Oliver Mangan, chief economist with AIB said.

"There was a marked slowdown in the rate of growth of new business, including exports, with firms reporting that the rising Covid cases had dampened demand somewhat. Job creation, while still strong, eased to its slowest pace in six months."

Mr Mangan noted that capacity pressures were again evident in November.

"Outstanding work posted another strong rise, with firms reporting staff shortages and delays with suppliers. Not surprisingly then, businesses continue to face marked upward pressure on costs for fuel, wages, energy, transportation and physical goods. This is translating into higher prices charged to customers, which increased at their fourth quickest rate on record," he said.