Services sector growth accelerates

2 September 2004
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03 September 2004 | Gareth Mytton

UK services companies bucked the recent trend for slower growth in August, according to the latest purchasing managers' index (PMI) report.

New contracts lifted the August services sector business activity index - a composite indicator of business conditions from CIPS and NTC Research - to 56.9, up from July's 56.2 and still well above the 50 figure that indicates no change on the previous month.

The buoyant economy helped services companies to increase their workloads, as did marketing activity and new products and services. Business-to-business, IT and computing, and personal services companies enjoyed the largest rises in new business.

Firms also increased their workforce at the fastest rate since 2001.

Input price inflation rebounded after easing for two months, with the index reaching 61.1. Increased fuel and energy prices - linked to oil prices - employment costs and higher raw materials costs were blamed.

In the euro-zone, the services sector business activity index slipped to 54.5 in August from 55.3 in July. Activity rose in all four of the largest economies, but more slowly.

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

SMsep2004

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