Higher growth brings price rises in UK services sector

5 May 2004
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06 May 2004 | Gareth Mytton

More than a quarter of UK services companies said activity had risen in April, according to the latest PMI figures, as they battled with rising input prices.

The services sector business activity index - a composite indicator of business conditions from CIPS and NTC Research - stood at 59, a rise on March's 58.7 but still well above the 50 figure that indicates no change on the previous month.

The biggest growth in new orders (down to 60.5) came in the hotels and restaurants, transport and communications, and business services sectors. Some firms said the launch of new products, and marketing campaigns, helped to attract new business.

Input price inflation gathered pace (58), as rising labour costs and commodities prices - steel, in particular - tested purchasers. Travel companies also said that fuel costs were up.

Growth was marginally higher in the euro-zone on the previous month, according to NTC Research. The service sector business activity index rose by 0.1 in April to 54.5. All four of the biggest economies experienced weaker growth than in recent months.

Meanwhile, in the US, 46 per cent of companies said growth was up, in the Institute for Supply Management's April non-manufacturing report on business. Its business activity index rose to 68.4, from 65.8 in March.

* 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 April, and previous reports, is available at http://www.ism.ws/ISMReport/index.cfm.

SMmay2004

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