New business boosts August service growth

4 September 2007
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05 September 2007 | Paul Snell

Increased activity in the IT and computing industry boosted growth in the service sector last month.

According to the latest CIPS/NTC Purchasing Managers' Index, where a figure above 50 represents growth, activity in the sector reached 57.6 in August, stronger than July's figure of 57.

Orders for new business remained strong, despite falling to a three-month low. In August the index recorded a figure of 57.7, slightly weaker than July's figure of 58, but still well above the no-change mark of 50.

The IT and computing; storage and communications; and transport sectors recorded strong growth in new business, with a more modest expansion noted in the hotel and catering industry.

Input prices continued to expand, although they slowed to a 10-month low in August. The index recorded a figure of 57.5 last month, down on July's 58.3. High costs were attributed to price rises further down the supply chain, such as increased food costs due to the recent bad weather.

Despite recent instability in global financial markets, optimism for increased growth in the sector remained strong, reaching 73.5.

SMsep2007

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