Growth of services activity remains strong

5 February 2007
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05 February 2007 | Antony Barton

Strong growth and new business continued in the services sector last month, although rates of expansion were weaker than in the last quarter of 2006.

The latest CIPS/RBS Purchasing Managers' Index (PMI), where a reading above 50 indicates growth, recorded 59.2 for business activity in January, down from 60.6 the previous month. This was the forty-sixth consecutive month of rising activity, with the latest increase attributed to orders from new customers and higher demand from existing customers.

Inflation of average output prices at 55.2 was the highest since 55.4 in August and the second strongest in over six years. Companies said this was due to higher salary bills and increased raw material costs, which raised input prices and encouraged companies to increase their own. Some also claimed that higher demand had given them a greater degree of pricing power.

Confidence that activity would increase over the next 12 months remained high, at 76.0, despite easing from the thirty-five month peak of 79.1 in December. This was linked with higher levels of new business, company expansion programmes, product and service launches and increased marketing.


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HS2 Ltd
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