Services sector recovery 'unprecedented'

4 August 2009

05 August 2009 | Jake Kanter

The UK services sector continued to show marked improvement last month as activity rose to a 17-month high, according to the latest CIPS/Markit UK Services Purchasing Managers' Index.

The industry's PMI reached 53.2 in July - where a figure above 50 represents growth - compared with 51.6 the month before.

The index has made an "unprecedented" recovery since recording a record low of 40.1 in November last year.

The July growth was supported by greater business marketing and improved market conditions. The level of new business bounced back from June's contracted figure of 49.7 to reach 52.7 last month.

Outstanding business continued to decline in July - albeit at a slightly slower rate than in June - indicating excess capacity in the services industry.

Staff numbers also registered a steep contraction, while prices charged by services firms remained below the 50 mark for the ninth consecutive month.

CIPS chief executive David Noble said: "The services sector is rebounding at an unprecedented rate after what has arguably been the most savage economic downturn since the end of World War II… Nonetheless, the scars inflicted on the sector by the troubled economy will take time to fade as companies are still cautious about committing to substantial spending."

Further coverage of PMI reports is available here

SMaug2009

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