04 July 2007 | Antony Barton
Business activity in the UK service sector increased sharply last month, due mainly to strong growth of new business.
The CIPS/NTC Purchasing Managers' Index for June, where a figure above 50 represents growth, recorded performance at 57.7, up from 57.2 in May.
New orders helped this growth, rising from 57.6 to 59.6. Reports also suggest increased efforts in marketing and work on new product launches promoted greater activity. Growth in new orders meant outstanding business rose from 51.7 to 52.0. This was a third successive monthly rise in backlogs of work.
More activity also meant a rise in employment, with a slight increase from 54.1 to 54.5. Job creation accelerated for the second month running, reaching its highest since February.
There was a strong increase in input costs in June. Up to 58.8 from 58.3, companies attributed the latest rise to higher fuel, energy and wage bills.
A slim climb in output prices, at 53.3 from 52.5, marked an accelerated rate of inflation from the 15-month low in May.
* Further coverage of PMI reports is available at http://www.supplymanagement.com/pmi