Employment growth in the Irish services economy continued in August, the twelfth successive month of increase noted by the NCB Purchasing Managers' Index.

After adjusting for seasonal factors, the index of overall business activity came in at 58.1, well above the no-change figure of 50. The figure for July was 59.4.

The index "remains close to the highest levels of the year and overall confidence remains high, if somewhat below the early months of this year," said Mr Eunan King, senior economist at NCB.

"Employment growth was up again towards the fastest pace of the year. Overall the report paints a picture of solid activity."

As well as addressing the needs of increased new business, firms said they were kept busy dealing with the growing volume of backlogs at their units.

The growth in employment stemmed from the new business and the need to deal with backlogs of work. "However, the pace of growth was tempered as margin pressures intensified."

The report said inflationary pressures in the services economy intensified in August, with panellists making reference to oil prices and wage inflation.

The seasonally adjusted data showed the 17th successive monthly decline in rates charged by service providers.

"Reports of strong competition and the need to offer incentives to clients in order to stimulate growth in new business were widespread."

The study found that positive expectations for future growth in activity were widespread.