THE services sector increased 0.6pc in March from the previous month, with accommodation and food services gaining the most.
Official figures from the Central Statistics Office (CSO) show the sector jumped 0.7pc over the year.
The monthly services value index (MSI) monitors trends in output at current prices of enterprises in the non-financial traded services sector.
It is also the first step in the development of a services production index which will measure volume change in the sector.
Accommodation and food services had the fastest growth at 7.3pc, when compared with February, followed by administrative and support service activities at 4.9pc and information and communication at 2.7pc.
Sectors which suffered contraction included wholesale and retail trade, which fell 2.5pc, while professional and technical services remained largely flat, slipping just fractionally by 0.1pc.
On an annual basis, administrative and support services posted the strongest gain, followed by information and communication and accommodation and food services.
Wholesale and retail trade and professional, scientific and technical activities posted declines.
Davy economist David McNamara said that as the services index doesn't give a measure of volume growth in the sector it isn't yet a reliable guide to actual output in the sector in the Quarterly National Accounts (GDP).
"We do know that retail sales volumes fell 3pc in Q1 following a 0.5pc rise in Q4, so this will detract from services output in the Q1 GDP figures," he said.
"The broad picture is that output in the services sector is being sustained by export-orientated companies in the IT sector, reflected in robust services exports figures throughout 2012."
The latest statistics come just days after NCB Stockbrokers reported Ireland's services sector had grown for the ninth consecutive month in April.
NCB economist Philip O'Sullivan said new export business recorded its 21st successive month of expansion during April, although the pace fell to an eight-month low.