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3 August 2011 |
The UK’s services
sector enjoyed strong growth in July buoyed up by new business, according to
the latest Purchasing Managers’ Index (PMI).
seasonally adjusted Markit/CIPS
Business Activity Index shows growth in the sector accelerated at its
fastest pace for four months, recording 55.4, a stronger performance than the
June figure of 53.9.
services and IT and computing registered the steepest gains in activity, but
falls were seen in hotels, catering and restaurants and the personal services
market conditions and higher enquiry levels contributed to the sector’s good
news story. However, employment levels were slightly down last month and
business confidence was low.
Input cost inflation continued
its recent fall in July, but remained at an elevated level. Higher energy and
utility bills, supply chain pressures and increased food costs were reported as
the principal drivers of inflation.
Paul Smith, senior economist at Markit, said: “A key question will be whether July’s above-average
increase in services sector activity can be sustained going forward. Given the
headwinds of austerity at home and the ongoing public debt issues in major
export markets, the scenario of a continued choppy recovery would, at the
present time, be the best forecast for the sector’s performance in the coming
Commenting on the encouraging figures, CIPS chief
executive David Noble said: “These are surprisingly
strong figures for the UK services sector, following on from a disappointing
manufacturing PMI at the start of the week. However, it’s far too early to
expect any improvement on employment figures as any green shoots will need time
to blossom before businesses confidence can improve.”