* Struggling Spain and Ireland dent services PMIs in Dec
* German and French businesses again show resilience
* Services jobs index slips from Nov's post-recession high
* December composite PMI holds unchanged at 55.5 vs Nov
By Andy Bruce
LONDON, Jan 5 (Reuters) - Growth in the euro zone services sector slowed in December as activity in Ireland and Spain shrank, highlighting a two-speed regional recovery as business continued to expand in Germany and France, data showed on Wednesday.
The Markit Eurozone Services Purchasing Managers' Index (PMI), which measures the activities of thousands of businesses ranging from banks to restaurants, fell in December to 54.2 from 55.4 in November.
While growth eased, the region's services sector still expanded for the 16th month in a row as the PMI stayed above the 50 mark that divides growth from contraction. It was revised up from an earlier flash estimate of 53.7.
Survey compiler Markit warned that behind the still reasonably strong headline figure, the disparity between the strongly performing French-German core and smaller euro zone economies, which have had to impose tough austerity measures to slash high debt levels, worsened in December.
"Near-record growth in Germany and strong expansion in France contrasted with a collapse in growth in Italy to near-stagnation and increased rates of decline in both Spain and Ireland," said Chris Williamson, chief economist at Markit.
He pointed to weak domestic demand from households in Italy, Spain and Ireland as a key reason behind the growth divergences, linked to budget austerity measures and economic and political uncertainty.
"Overall, the data suggest that the euro zone will have grown by around 0.5 percent in terms of final quarter GDP," said Williamson.
"But the scene is set for a two-speed single currency area as we move into 2011, with Germany growing at twice the euro zone average while some countries face double-dip recessions."
Weakening economic fundamentals in the euro zone periphery stand to aggravate a slump in investor confidence which forced Ireland to seek an EU/IMF bailout in November and raised fears that Portugal, Spain and even Italy might also have to ask for international aid at some point.
The euro zone employment index slipped to 51.9 in December from November's post-recession high of 53.2, although still showing the eighth month in a row of jobs growth among services companies.
The latest official statistics show euro zone unemployment rose slightly to 10.1 percent in October from 10 percent in September. Economists expect it to stay put at 10.1 percent in November.
The relatively strong pace of activity in Germany and France helped boost euro zone business expectations for the next 12 months. Expectations grew at a faster rate for the third month running in December, while order books expanded at the quickest rate in four months, the survey showed. Markit's Eurozone Composite PMI, which combines survey data from both the services and manufacturing sectors, held at 55.5 in December, unchanged from November and revised up from an initial estimate of 55.0.
While the composite reading was helped by a new orders index that rose to an eight-month high of 55.2 from November's 54.0, the survey's jobs component eased off from November's post-recession high.
A Reuters poll of more than 50 economists last month showed euro zone economic growth would linger between 0.3 percent and 0.5 percent for each quarter through to the end of 2012. (Editing by Susan Fenton)