Business activity in the Irish services sector remained strong in August as new business spurred a further rise in employment despite increasing costs.
The seasonally adjusted NCB/NTC Purchasing Managers' Services Index slipped slightly to 62.0 in August from 62.3 in July but remained above the 50.0 mark that indicates no change in business conditions.
Growth in new business remained strong despite slipping slightly to 61.2 from July's 62.1.
"Conditions in the service sector remain buoyant with firms commenting on healthy demand supported by marketing campaigns and expanded sales teams," said Eunan King, senior economist at NCB Stockbrokers.
"Confidence to invest appears strong, supported by a higher volume of inquiries and successful tenders for project work."
At 55.2, employment levels in the services sector continued to expand in August. The rate of growth was below the 56.7 recorded in July but marked two years of uninterrupted growth.
However, August's data signalled not only that costs facing service providers had again risen but also that the rate of inflation had picked up to its fastest since June 2002. That part of the index jumped to 65.3 from 61.2 in July.
"The sharper increase in costs reflected the inflationary influence of high oil prices on derivative items such as fuel and energy, and improved salary awards by many firms," NTC said.