The services sector continued to expand in September, but the rate of expansion was marginal, new data showed today.

Service exports continued to play a leading role, and the technology sector showed a rise in overall activity.

According to the NCB Services PMI, Irish service providers increased business activity last month, with the index showing a reading of 51.3, above the 50 mark that separates expansion from contraction. This compares to the previous month's reading of 51.1

"The rise in activity was slower than the long-run series average. Where activity rose over the month, panellists often linked this to increased export demand," NCB said.

However, there was a drop in overall new business as new orders declined at a solid pace, the fastest since December last year. New export orders were higher in in September, fuelling the rise in new activity, as the sector increased. New services exports continue to lead the way, rising for the eighth time in the past nine months, from 50.4 to 53.1.

The technology sector put in a strong reading of 77.2 for overall business activity, compared with 54.2 for financial services. New business was also stronger in the sector.

"Ireland has invested heavily in attracting the best technology companies in the world to locate in Ireland and this is helping investment, employment and confidence in Ireland," said NCB's chief economist Brian Devine.

The survey highlighted continued, although muted, optimism among respondents that activity will show growth in 12 months' time, with growth of external demand a factor.

Input prices rose for a tenth month as energy and fuel costs climbed higher, while output prices fell at a marked pace, due to intense competition.

Staffing also fell in the month as businesses said departing staff were not replaced in some cases.