NCB's purchasing managers' business activity index for the services sector in September jumped to 53.7 from 52.5 in August.

Strong growth in the State's services sector in September failed to prevent jobs losses but is still "very encouraging evidence of the resilience of the Irish economy", according to NCB Stockbrokers.

It was the tenth successive month that the index stayed above the key 50 mark.

An index above 50 indicates a level of growth on the previous month while an index below 50 indicates worsening conditions.

NCB chief economist Mr Eunan King said the latest services data were encouraging for the entire economy.

"Coming on the heels of indications that a slowdown in manufacturing may be stabilising, a second month of accelerated growth in services sector activity is very encouraging evidence of the resilience of the Irish economy," he said. Of the 600 Irish private sector services companies surveyed by NCB, 79 per cent said business activity was either higher or the same as the situation a month earlier.

Just over half, 50.3 per cent, of panel firms expected the level of business activity to be higher in 12 months than at present and 39.8 per cent expected the same level of business. Just 9.9 per cent said they expected a deterioration in conditions.

The incoming new business index increased to 54.9 from 53.1 in August, with 80 per cent of panel firms stating the levels of orders placed with them was either higher than or the same as one month ago.

The rate of inflation of average business costs increased slightly in September with the input costs index running at 63.3 compared with 63.1 in August.

However, the rate of inflation was still well below levels seen earlier in the year.

Higher fuel and energy bills along with higher insurance premiums were all cited by firms as having driven up costs.

In employment the picture continued to be poor with numbers at work in the sector falling for the third month in a row.

The employment index fell to 48 from 48.9 in August, the sharpest drop since last November.

Just 8.3 per cent of firms said they employed more workers than the month before while 76.9 per cent said their staffing levels had not changed and 14.8 per cent said their employee numbers had fallen.