Services sector ‘firing on all cylinders’

3 March 2010

3 March 2010 | Jake Kanter

Activity in the UK services industry reached its highest point in more than three years last month, according to the latest Purchasing Managers’ Index (PMI).

The CIPS/Markit Services PMI – where a figure above 50 represents growth – recorded 58.4 in February. This was the fastest growth since January 2007 and represented a solid increase on the 54.5 registered in the first month of this year.

Stronger market conditions and better weather meant new business activity jumped from 53.4 in January to reach 57.5 last month – the highest point since September 2007.

Staff numbers continued to decline last month, however, albeit at a slightly slower rate than in January. Backlogs of work also remained in contraction.

Input prices and prices charged continued to increase in February, reflecting higher fuel costs and VAT adjustments.

CIPS chief executive David Noble said: “After the snow-related blip at the start of the year, the services sector is pretty much firing on all cylinders now. February saw business activity surge at its fastest rate in over three years as the sector helps to drive the UK economy further out of recession.”

The Eurozone Services Business Activity Index registered 51.8 in February, a slightly weaker rate of growth than the 52.5 recorded the month before.

Further coverage of PMI reports is available here.

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