Ireland's services sector expanded at its softest pace in over four years last month as a construction sector slowdown and the global credit crunch weighed on growth, a survey showed today.
The NCB/NTC purchasing managers' index fell to 54.8 in September from 57.0 in August. That was the lowest reading for the index since August 2003, although still comfortably above the 50 mark that separates growth from contraction.
"Weakness in the construction sector was cited, as was in some cases, the credit crisis," said Eunan King, senior economist with NCB Stockbrokers.
The credit squeeze that took hold in global markets in August, triggered by worries about banks' exposure to high-risk debt, has made borrowing harder and more expensive.
While the business confidence index rose to 70.1 in September from an 11-month low of 66.7 in August, "the degree of optimism was still well below the survey average," survey compilers NTC Economics wrote in a commentary.
An end to Ireland's decade-long property boom is also raising worries about the country's thriving economy.
The survey showed firms' costs rose in September at their fastest pace in six months, pressured by fuel costs and increasing salary levels, while the rate of job creation fell to 52.9 from 55.9 in August and was at its weakest level since June 2004.