Growth in the services sector remained weak last month, with business confidence falling to its lowest level since last November, according to the latest NCB Purchasing Managers' Index.
The NCB PMI dropped to 51.1 from 51.7 in July - with the 50 mark separating growth from contraction.
Exports were once again the main driving force behind the expansion in activity in August with new export business up from 49.6 to 50.4 on the back of increased demand from the Middle East, the UK and the US. However, the new orders index contracted for the fourth month in succession, falling to 47.9 from 49.2.
"The familiar two-tiered story is evident again as domestic demand caused new business orders generally to decline despite the rise in export orders," said NCB chief economist Brian Devine.
The fastest decline in activity was recorded in the Financial Services sector, where activity fell for the third month in a row. Business activity at technology, media and telecoms service providers also contracted markedly last month and at a sharper pace than in July.
The data indicates that service providers remain optimistic regarding the prospects for activity growth. However, the level of positive sentiment weakened and was at its lowest since November 2010 when Ireland received the €85 billion bailout from the EU-IMF.
Outstanding business decreased again in August, although the rate of decline in backlogs moderated slightly since July, it remained marked.
Employment levels at service providers fell again as it has done for every month bar April since March 2008. But NCB said the rate of job shredding was "modest" and broadly in line with those recorded in the previous three months.
Higher fuel and energy costs led to a rise in input prices for the ninth consecutive month. Output costs fell for the 37th month in a row. The rate of decline remained "substantial" but was slightly slower than that seen in the previous month.
