Ireland's services sector grew at its fastest pace in four months in June on rising export orders, but employment fell and companies had to slash prices amid weak domestic demand, a survey showed.
Ireland, which was forced to seek an international bailout late last year, is struggling to secure sustained growth in its services sector as it bids to get domestic demand growing again in the face of high personal debt.
The NCB Purchasing Managers' Index, which measures activity in the services sector, registered "modest growth" at 52.4, up from 50.5 in May. It was above the 50 mark separating growth from contraction.
"The latest NCB services PMI shows that activity in the sector is still expanding," said Brian Devine, economist at NCB Stockbrokers. "(But) new business contracted for the second month in a row amid fragile client confidence."
The growth in services was driven by new products and services, the survey found. New export orders were mainly from existing customers in developed markets, the report said, and the rate of expansion in exports eased to the slowest pace in three months.
Confidence that services activity will be stronger in 12 months' time remained high at 60.3. But the figure slipped from 62.4 in May and was at a seven-month low.
The Irish government is relying on growth to bring down a debt burden set to peak at around 120 per cent of gross domestic product in 2013 and persuade international investors to lend to it once an EU-IMF bailout package runs out that year.
The data in the survey was compiled from questionnaires given to 600 private-sector services companies.