Activity in Ireland's services sector continued to rise in May, but employment still remained weak, the latest NCB Purchasing Managers’ Index showed.
The index rose to 52.4 during the month, remaining above the 50 mark that separates growth from contraction. The rise follows a reading of 51 in April, the first time activity increased in the sector in more than two years.
The sub-index measuring new business also continued to climb, growing from 51.4 to 52.3.
The report noted that the only sector to post a decline in activity was transport and leisure, but this should be boosted by the weak euro in the coming months.
However, employment remained below 50, at 46.8. This is in contrast to the manufacturing index, which saw employment rise in May.
"The services sector is far more important for employment than the industrial sector, which accounts for just 13 per cent of employment," the report said. "The weakness in the services sector labour market was evident in yesterday’s Live Register figures."
Meanwhile, service sector growth continued in the big emerging economies and Britain but at a slower pace during May while a resurgent France helped the euro zone buck that trend.
The euro zone's dominant service sector appears unfazed so far by a crisis of confidence in the fiscal health of euro zone member states that has wreaked havoc on financial markets.
The Markit Eurozone Services Purchasing Managers' headline business activity index for the 16-nation currency area rose to 56.2 in May from 55.6 in April, the ninth month in a row it has been above the 50 mark that separates growth from contraction and slightly higher than a preliminary reading.
Activity at French firms grew at the fastest pace in nearly four years in May, although their German and Italian peers showed signs of struggling to keep up, according to the PMI surveys for individual euro zone countries.
The purchasing managers surveys recorded order books expanding at a slower rate for service companies ranging from banks to restaurants in the UK, euro zone and China, although the jobs outlook was generally brighter.
Firms in the euro zone ended a two-year stretch of job losses as the headline PMI index there hit its highest since August 2007. But British companies, worried about impending deep public spending cuts, shed staff in May. The UK PMI headline activity index edged up to 55.4 from 55.3 in April.
