Services sector score shows modest growth

3 March 2011

3 March 2011 | Lindsay Clark

Growth in the UK services sector eased back to a modest pace in February after an eight-month high in January.

The Markit/CIPS UK Services PMI survey found expansion of the sector fell back to levels seen prior to the severe winter weather in December.

February’s seasonally adjusted figure was 52.6, down from January’s peak of 54.5. An index score of 50 indicates no change.

The survey found that new business was rising at a solid rate and confidence strengthened to a nine-month peak.

CIPS CEO David Noble said: “While the sector wasn’t exactly a shrinking violet in February, the latest PMI data is certainly shy of what we might have hoped for. January’s bounce back petered out slightly, back to below average growth performance compared to 2010. The sector remains on the sidelines as reliance on manufacturing and construction for GDP growth intensifies.

“Inflation, a threat which is impacting on all areas of the economy, has been one of the biggest burdens for this all-important sector. Input prices continue to increase at a historically steep pace, affecting those in consumer facing and transport industries the most.”

Meanwhile, research firm Markit has calculated a composite PMI based on the data from all sectors collected from buyers in February. This scores 52.6, down from January’s high of 54.5.

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