Business activity in the services sector continued to grow in January, but the rate of expansion was slower than the two previous months, according to data published yesterday.
The NCB purchasing managers' services index shows that overall activity in the sector hit 57.3, the ninth consecutive month in which it remained above the critical 50 mark.
The index takes the previous month's reading as 50. Any result above this signals growth, while any result below this benchmark means activity has decreased.
However, the index shows that the rate of growth has slowed slightly. Activity in December registered 58.8 while in November, the sector's best month since April 2002, it hit 59.5.
At the same time, margins in the industry appeared to be coming under increased pressure in January. Charges (prices charged for services) fell to 48.1, compared with a dip to 49 in December. Costs continued to increase, rising to 58.8 in January, almost a point up on December's result of 57.9.
NCB's statement said businesses were blaming higher employment costs, increased insurance premiums and rising telecoms and post charges. Fuel and energy costs also remained high. Increasing costs may have had an impact on the rate of employment expansion, which pegged its slowest growth since last September at 50.4, when it came in at precisely the same level after falling for more than a year. November and December both showed reasonable growth under this heading at 52.9 and 53 respectively.
Despite this, confidence in the sector soared, reaching its highest level since August 2000. Sentiment registered 81.2, reflecting a belief that the global economic recovery will be sustained this year.
Commenting on the results yesterday, NCB's senior economist, Mr Eunan King, said the sector continued to show robust growth in January.
