Jobs take a hit as activity across the services sector shrinks again
ACTIVITY in the services sector shrank in January, for the second month running.
Jobs were badly hit by the trend. The number of people at work in the sector fell at the sharpest rate since April 2010, according to NCB Stockbrokers' latest purchasing managers' index (PMI).
The index is based on a survey of business managers.
The news comes after the Central Bank this week slashed its forecast for economic growth and said unemployment would rise to an average of 14.6pc this year. Official figures had shown a drop in overall unemployment in January.
Despite the negative trend, business confidence is actually on the rise, according to the NCB research.
Managers are convinced that orders will pick up as the year goes on.
In a now-familiar trend, exported services offered the main bright spot in the January statistics.
New export orders expanded for the twelfth month of the last 13, and the heavily export-oriented tech sector was the only area of the economy adding jobs in significant numbers.
The increase was too little to support the overall jobs market.
NCB's Brian Devine said employment in the sector has suffered the sharpest fall in 21 months.
A quarter of services firms cut staff numbers -- compared to 9pc that hired new employees.
Jobs numbers fell in line with a decline in orders from the domestic market.
On the whole managers opted not to replace departing staff, rather than make redundancies, according to the survey results.
While Ireland suffered, there is better news from Irish export markets, according to research just published from Markit.
In the UK, the services PMI surged in January to record the strongest growth since March, beating economists' estimates.
The same trend was seen across the eurozone.
The eurozone service PMI was in positive territory for the first time since August.
The stronger trend has raised hopes that the eurozone could avoid a recession in the early part of this year.
"It is encouraging to, not only see signs that the German economy has sprung back into life, but also that the rate of decline in the periphery has started to ease quite substantially," said Chris Williamson, Markit chief economist.