DUBLIN, Oct 5 (Reuters) - Ireland's services sector continued to expand in September, unlike much of Europe, although the pace of growth slowed slightly due to growing worries about the impact of inflation, a survey showed on Wednesday.
The AIB S&P Global Purchasing Managers' Index (PMI) for services slipped to 54.1 from 54.7 in August, inching further below the long-run average level of 55.1 but well above the 50 level that marks growth in activity.
Activity has grown consistently since March 2021, when the Irish economy was emerging from a third COVID-19 lockdown, and is holding up much better than in the UK and euro zone, where flash services readings for September were in contraction territory at 49.2 and 48.9, respectively.
While the euro zone survey suggested the bloc as a whole was likely entering a recession as consumers rein in spending amid a cost of living crisis, Ireland's finance ministryand central bank see growth in Ireland slowing rather than stopping over the next year.
Nevertheless the strength of confidence among Irish services firms in the outlook for the next 12 months - while remaining positive - was the weakest in nearly two years and well below the long-run survey trend, PMI survey showed.
The survey's authors said companies mentioned that their forecasts had been hit by the current inflationary environment, especially regarding energy, and a shortage of disposable income.
The rate of input price inflation was little changed from August's six-month low, but still among the highest on record while the increase in prices charged for services was the sixth highest since the survey began in 2000.
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