News
Service sector recent gains maintained
20/04/2010
Positive news from CIPS/Markit Purchasing Managers’ Index® (PMI®) in March shows service sector growth sustained.
Posting a figure of 56.5, down from 58.4 in February, but still above the 50 neutral mark. The sector maintained its 6-month level of confidence.
David Noble, Chief Executive Officer at the Chartered Institute of Purchasing & Supply (CIPS), said:
“The services sector continues to play a strong role in the recovery of the UK economy.
“It is hugely encouraging to see the number of jobs in the sector increase for the first time in nearly two years. Whilst business conditions have been recovering for a few months now, most employers have been wary of taking on new staff until sure this is a genuine and sustainable recovery. Whilst the employment increase was only marginal, we do seem to have reached a tipping point which hopefully means we will see continued job creation throughout the year.
“Input costs rose again in March as suppliers began to increase some of their prices. However, strong competition in the services sector means businesses are not able to pass these costs onto customers and so are having to absorb them themselves. Whilst this may be good news for those worried about inflation, it is less positive for the profitability of these businesses. At some point they will have to start passing costs on to customers.
“Whilst the services sector as a whole is recovering strongly now, smaller businesses are lagging behind. Purchasing managers reported that these businesses are still suffering from the effects of the recession and continue to lay-off staff despite large and medium sized companies expanding their payroll. It won’t be until we see these smaller businesses really start to recover that we can say the services sector is returning to full health.”
For press enquiries, call the Press office on 01780 756777 or email: press@cips.org. The PMI data is available to purchase.