DUBLIN, July 5 Reuters Growth in Ireland39;s services sector slowed markedly in June as concerns over inflation cut firms39; expectations for the next 12 months to the lowest level since the country was still in the grip of the COVID pandemic, a survey showed on Tuesday.

The AIB SP Global Purchasing Managers39; Index PMI fell to 55.6 from 60.2 in May, but stayed above the 50 mark separating growth from contraction for the 16th consecutive month as well as the 22year longrun trend level of 55.1.

The reading was the second weakest increase in activity in over a year as input prices and charges rose at the fourthfastest rates on record and at a similar level to May.

Firms said demand continued to be driven by a postpandemic recovery, but there were reports that concerns over inflation and geopolitical instability had weighed on sales, the survey39;s authors said.

As a result, business expectations fell to the lowest level since October 2020, when firms were spooked by a second wave of COVID19 that led to a further lockdown of the economy.

The transport, tourism and leisure component of the survey also went from posting the fastest rate of increase in May to the secondweakest last month, significantly behind the financial services and technology, media and telecoms sectors.

Employment growth across services firms, however, remained strong and only eased slightly.

The headline reading was above the flash June services PMIs for the euro zone and UK of 52.8 and 53.4,…