The Irish services sector expanded further in July, with growth hitting a nine-year high as business activity continued to rise during the month.

The Investec Purchasing Managers' Index of activity in services, which covers businesses from retail to banks, rose to 63.4 in July from 63.3 in June, marking a third year of expansion.

New business rose strongly, with the index showing levels of growth that were the fastest in 15 years. Investec Ireland chief economist Philip O’Sullivan said the rate of growth was only behind July and August of 2000.

The survey showed the euro weakness versus sterling yielded some benefit for businesses, with new export business rising for the 48th month in a row as new work from the UK was secured. However, average input prices were also affected by the poor exchange rate, with the index rising at the fastest pace since September 2008, leading to the profitability index rising at its slowest rate since April.

The rate of job creation increased at a faster pace in June, and firms were confident in their outlook overall.

“It is clear that services firms in Ireland retain a high degree of optimism on the outlook for their sector,” Mr O’Sullivan said. “Given the improving dynamics around the domestic economy and the continued tailwind to exports from favourable FX moves, we believe that this positivity is well-founded.”

Additional reporting: Reuters