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4 April 2012 | Angeline Albert
The strong figures of the latest services sector Purchasing Managers’ Index (PMI) shows thoughts of a “double-dip recession were unfounded”, according to CIPS CEO David Noble.
According to the latest Markit/CIPS UK Services PMI the rapid expansion of activity and new business in March pushed first quarter activity to its fastest rate of growth since the second quarter of 2010.
The PMI registered a reading of 55.3 in March, up from February’s figure of 53.8. A reading above 50 indicates expansion. A rise in volumes of new business contributed to March’s healthy figure. Companies responded to their increased workloads and rising business confidence by employing more people and also reported clients were more willing to commit to firm business decisions.
David Noble, CEO at CIPS said: “The UK service sector has rounded off quarter one in confident fashion, with growth at its highest since quarter two 2010, showing that fears of a double-dip recession were unfounded.”
The PMI also revealed that March’s data showed little evidence of capacity pressures in the UK service sector with volumes of work outstanding little changed since February. Input price inflation was also at its lowest level in 18 months, though the higher cost of fuel ensured overall operating costs rose.
Chris Williamson, chief economist at Markit said: “Faster growth of services activity in March indicates that the economy is on the up again, skirting recession as business continues to bounce back from the lull seen late last year.”