03 March 2004 | Gareth Mytton
British services companies saw a marginal fall in growth in February but activity still showed a rapid increase, according to the latest PMI figures.
The business activity index, produced by CIPS and NTC Research, stood at 59.5, slightly lower than January's 59.8. Nearly 30 per cent of companies said activity was up on the previous month, thanks to stronger economic growth and another increase in new business.
Customer confidence in the global and domestic recoveries meant they placed higher volumes of orders in February (60.6). Promotional activities also helped to win new business.
Companies again said that new contracts were longer than in previous months, which led to higher backlogs of work. They also took on more staff (52.1) to meet current and anticipated new business.
Some financial intermediation companies increased their charges in line with February's rise in base rates. And overall, services companies used stronger demand to increase their prices (52.4).
But higher supplier prices, input costs and fuel prices were all named as factors in rising input prices (55.5). The hotels and restaurants, financial intermediation, and business services sectors all saw big increases.
In the euro-zone, the Spanish services sector enjoyed the fastest national growth as the index slowed slightly to 56.2 in February. Germany, again, saw the weakest growth.
In the US, the Institute for Supply Management's (ISM) non-manufacturing report on business put the business activity/production index at 60.8. Twelve industry groups reported growth, while two said it had fallen and three reported no change on the previous month.
* 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 February, and previous reports, is available at http://www.ism.ws/ISMReport/index.cfm.