New business growth in the Irish services industry slowed for the third month in a row in April, according to the Investec Purchasing Managers' Index (PMI).

The PMI's headline reading was 59.8, dropping from the March figure of 62.8.

It means growth in the sector is at its slowest since February 2014, marking a 26-month low.

Investec chief economist pointed to the delays in formation of a new Irish government, as well as the impending Brexit vote, as two of the key reasons for sluggish growth in new business.

O'Sullivan said:

"We understand that this relates to a combination of the EU referendum in the UK and the drawn-out process around the formation of a new government in Ireland since the general election held on February 26.

"With that being said, we note that just over three times as many panelists recorded an increase in new business during April compared with the numbers posting a decrease".

In spite of the slowdown, employment is up in the services industry.

Staff levels are increasing at an impressive pace, with employment registering its 44th consecutive month of growth.