The Irish services industry grew again last month, driven by new business and strong demand, the latest figures show.

The NCB Stockbrokers Purchasing Manager's Services Index hit 57 in August, signalling continued growth in the sector despite growing concerns about the construction market. Any reading above the benchmark level of 50 means activity has increased, while any result below that number means business has contracted.

NCB said yesterday that the index has remained above the critical 50 mark every month since June 2003.

Dermot O'Brien, the stockbroking firm's chief economist, said yesterday the August figure was the highest this year since April, when it reached 58.1.

"New orders, especially export orders, grew solidly and employment gains strengthened in August. Business expectations eased back, however, influenced in part by concerns about the construction sector."

The new business index, which measures the rate at which new orders are coming in to firms in the sector, reached 56.9 in August, making it the 51st consecutive month of growth. However, the reading was the lowest since May, when it was 55.3 and was down on the July figure of 57.9.

NCB said that "a number of firms that registered a reduction in new orders since July commented on unfavourable conditions in the construction sector".

The survey shows that companies in the sector continued to hire new staff in August in an effort to increase capacity to meet increased demand.

The employment index reached 55.9, indicating that job numbers grew at a faster rate than in July, when it dropped to a 27-month low of 54.2.

NCB said that many of the firms hired new staff in response to demands placed on their businesses by new orders won earlier in the year.