DUBLIN, Sept 3 (Reuters) - Ireland's services sector shrank at the slowest pace in August in nearly one and a half years, with businesses more optimistic than at any time since June 2008, a survey showed on Thursday.
The NCB Purchasing Managers' Index rose to 46.7 from 42.4 in July, staying below the 50 mark that separates growth from contraction but at the highest level since March 2008 after making one of the biggest upward leaps in the survey's history.
Encouragingly, the component measuring new export business -- essential for the small and open Irish economy to emerge from recession -- rose to just short of the 50 mark, said Brian Devine, economist at NCB Stockbrokers.
"The key stimulus for the Irish economy will come from regaining competiveness and attracting demand as the global economy recovers," Devine said.
The business expectations sub-index advanced further into positive territory, rising to a 14-month high of 56.9.
"For the fourth consecutive month in August, companies were optimistic regarding future activity levels," said Markit, which compiles the data.
Data on Wednesday showed the number of people claiming unemployment benefit in August rose at the slowest pace in over a year, signalling that the economy may be over the worst of the recession.
The PMI survey showed the rate of job cuts in the services sector remained severe, but eased slightly to the lowest level in almost a year. (Reporting by Andras Gergely; Editing by Andy Bruce)