Services companies enjoy business boom

2 December 2004
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02 December 2004 | Gareth Mytton

UK services companies enjoyed a pre-Christmas boost with another rise in activity in November, according to the latest purchasing managers' index (PMI) report.

The services sector business activity index, a composite indicator of sector conditions from CIPS and NTC Research in which an index of 50 indicates no change on the previous month, rose to 56.7, up from 56.3 in October.

The IT & computing, financial intermediation and business-to-business service sectors enjoyed the strongest increases in business.

The new orders index, at 56.8, was the highest since June, on the back of increased spending by clients, new contracts and marketing activities.

Companies took on more staff to handle increased workloads and anticipated future orders, as well as business developments (including takeovers and acquisitions).

However, input price inflation, at 63.2, was the strongest since September 2000. The recent increase in the minimum wage was a factor in higher labour costs, but increased charges from suppliers, higher utility bills and rising fuel costs.

In the euro-zone, the services sector business activity index rose by fell to 52.6, from 53.5 in October. France again enjoyed the fastest growth in activity in output.

In the US, the Institute for Supply Management (ISM) report on non-manufacturing business said activity accelerated in November. The business activity/production index rose by 1.5 on the month to 61.3.

• Coverage of previous months' services, manufacturing and construction PMI reports is available at http://www.supplymanagement.com/pmi.

• More information on the UK and euro-zone PMIs is available at www.ntc-research.com.

• The full text of the ISM reports on the US non-manufacturing economy for November and previous months is available at http://www.ism.ws/ISMReport/index.cfm.

SMdec2004

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