Services sector continues strong growth

5 December 2006
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05 December 2006 | Paul Snell

The UK services sector continued its strong growth in November, primarily due to an increase in new business, according to the latest CIPS/RBS Purchasing Managers Index.

A reading above 50 indicates growth and a figure of 59.8, up from a reading of 59.3 in October and the highest in three years, was recorded for November.

The index recorded an increased reading of 60 for new business, up from 59.1 in October. This was the strongest increase in new orders since April 2004.

The increase in new business led to more recruitment, particularly among sales staff, to capitalise on new demand. Employment increased rapidly to 55.4, the largest figure in eight and a half years. October's figure was 54.

But the PMI also suggested that the sector was straining to cope with the impact of its own growth. The outstanding business index increased again to 53.1 in November, from 52.5 in October. Some companies also reported that they were finding it difficult to recruit additional staff.

Coverage of previous PMI reports is available at the link below.

SMdec2006

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