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Pace of job creation in services sector hits highest in 15 years

The rate of job creation in the services sector last month rose at its fastest pace in at least 15 years, a survey has found.

The sector here ended the year on a high, with December recording faster increases in both activity and new business, according to the latest Purchasing Managers’ Index (PMI).

And reports of improving economic conditions and an increase in work boosted optimism among companies about the prospects for this year.

However a separate survey of business conditions more generally in the Eurozone showed the now 19-member bloc ended 2014 with its worst quarter for over a year as further price cutting failed to significantly drive up business activity, adding pressure on the European Central Bank to act.

Of concern is the continuing downturn in France and Italy and only a stuttering performance in Germany.

But Philip O’Sullivan, economist with specialist bank Investec, said the services sector in Ireland at the end of last year enjoyed increased new business, driven by better economic conditions and improved confidence.

“The main highlight of the report is the employment index, where the rate of job creation accelerated to the joint fastest pace since the series began in May 2000,” he said.

“Staffing levels in the sector have now increased in each of the past 28 months.”

The seasonally adjusted business activity index rose for the second successive month to 62.6 in December, from 61.6 in November.

Although dipping from the previous month, sentiment among companies remained strong. New business increased at a faster pace, with the launch of new products helping new orders rise.

A sharp rise in export orders was recorded, with the UK, United States and Middle East all mentioned as sources of new business.

It comes just days after a separate survey showed that Ireland’s manufacturing sector ended the year on a strong footing, with the increase in new export sales the best since 2010.

By contrast, the business picture in the Eurozone was less than inspiring. December’s Composite Purchasing Managers’ Index (PMI), based on surveys of thousands of companies across the region and seen as a good indicator of growth, missed an earlier flash reading of 51.7, coming in at 51.4.

“The Eurozone will look upon 2014 as a year in which recession was avoided by the narrowest of margins, but the weakness of the survey data suggests there’s no guarantee that a renewed downturn will not be seen in 2015,” said Chris Wiliamson, economist with financial information firm Markit, which compiles the data.

Britain’s economic recovery softened further as growth across services companies slowed sharply during December to its lowest level since mid-2013.

Sterling slipped to a 17-month low against the dollar after the data was released.

The survey showed that growth in new orders and employment slowed across the businesses that make up the bulk of Britain’s private sector economy.

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