05 November 2003 | Gareth Mytton
Business activity in the UK services sector in October grew at the fastest rate since November 1999, according to the latest PMI figures.
The seasonally adjusted services business activity index - a composite indicator of economic conditions published by CIPS and NTC Research - stood at 59.1, well above the 50 figure that indicates no change on the previous month.
Almost three times as many companies said activity was up than reported a decline. This was largely attributed to rising confidence and successful new business ventures.
Nearly 29 per cent of businesses reported a rise in new orders (58.4). The biggest increases were for financial intermediation and IT companies, which also took on the most staff. The increases in orders were the main cause of marginal growth in backlogs (51).
Higher fuel prices hit transport & storage firms in particular, pushing up overall costs (56). Increased labour costs were also mentioned, as the minimum wage increase affected hotels and restaurants.
In the euro-zone, NTC Research also reported robust growth in October. The business activity index of 56 was the highest since December 2000.
Activity not only rose in all countries in the euro-zone, the expansion was faster than in September. France and the Republic of Ireland saw the fastest growth, and Germany had the weakest.