UK service sector still going strong

5 December 2005
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05 December 2005

Business in the UK service sector continued to grow in November, according to latest figures.

New contracts - particularly in the IT and computing, transport and storage and business-to-business service industries helped boost activity.

The overall CIPS/RBS purchasing managers' index (PMI) - a composite indicator in which a number above 50 indicates growth - recorded a reading of 55.8, slightly down from October's three-month high of 56.1.

Staffing levels increased to cope with the workload - the employment index recorded a reading of 51.2.

Input prices continued to rise in November with panellists reporting high prices for fuel and energy. However, inflation eased to a four-month low and firms said they were able to offset increased input costs with higher output charges. The average prices charged index recorded a level of 52.5.

More than half of the companies surveyed were positive about prospects for a year's time, with the business expectations index coming in at 72.7.

Roy Ayliffe, director of professional practice at CIPS, said: "Encouragingly for service providers, input price inflation eased off as a result of weaker oil prices. However, purchasers still struggled to keep overall costs down amid reports of high energy and fuel prices and increased labour costs. Overall, new contract wins and the expectation of converting business leads into hard sales kept spirits high about the sector's future."

Activity in the Eurozone services sector expanded at its fastest rate for 16 months in November, according to RBS/NTC. It went from registering 54.9 in October, to 55.2 for November.

More information on the Eurozone PMIs is available at

Business activity in the non-manufacturing sector in the US increased in November with the Institute for Supply Management's (ISM) non-manufacturing report recording an overall index 58.5%.

Click here for the full text of the ISM reports on the US economy for previous months


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