05 July 2004 | Kathryn Manning
Services sector activity increased for a fifteenth successive month in June - encouraged by new business and a strong rise in marketing and advertising work.
But a second monthly fall in the business activity index showed growth easing from the rate recorded in late 2003.
The services sector business activity index - a composite indicator of business conditions from CIPS and NTC Research - showed growth easing at 56.8, from 58.2 in May.
Overall, activity rose particularly sharply in the hotels and restaurants and business services categories. Advertising work also boosted new business growth.
But reports indicated firms had to work harder to secure new contracts. The growth of new business weakened from previous high rates, posting 57.1 against 58.2 in May. The slowdown in activity expansion was most marked in the transport, communications and IT sectors.
Firms reported that the main drivers of input price inflation were higher fuel costs, increased raw material prices and the latest rise in interest rates.
At a level of 55.3, down only marginally from 55.8 in May, the Reuters Eurozone service sector business activity index signalled growth for the twelfth consecutive month, according to NTC Research. Expansion was strongest in Italy and weakest in Germany.
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 economy for June, and previous reports, is available at www.ism.ws/ISMReport/index.cfm