Are things actually OK in Ireland's financial services sector?

It's difficult to fathom, but it seems that Ireland's financial services industry might be faring better than most other sectors, with more companies hiring and fewer firing than the country as a whole.

The latest business sentiment survey by KBC Bank and the Institute of Chartered Accountants in Ireland paints a fairly bleak picture, with a majority of firms looking to reduce headcount rather than look for alternatives such as reducing salaries.

It has to be said that the survey doesn't specifically cover financial services, but a "large proportion" of the respondents within the broader 'business services' sector are from the industry.

Just 10% of firms in this category had hired in the last three months, while 43% looked to reduce payroll costs. Obviously, these are fairly grim statistics, but compare favourably with the overall picture, where 6% of businesses recruited and 52% looked to pare back.

Austin Hughes, chief economist at KBC Bank in Ireland, says: "The financial services sector is holding up better than feared. The IFSC is home to a lot of back office and fund administration work, which is less vulnerable than other areas of financial services and the banking guarantees enacted by the government have meant there hasn't been the same imperative to reduce headcount immediately."

Hughes says that business services ranks low down the badly affected industries. Only the public sector has held up better, he says.

The figures echo those from the Central Statistics Office in Ireland, which suggest there were actually more people working in financial services at the end of last year than the same time in 2007.