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3 July 2013 | Adam Leach
Activity in the UK services sector expanded at its fastest rate for more than two years in June as confidence, employment and new business also hit highs not seen for several years.
The Markit/CIPS UK Services Purchasing Managers’ Index for June recorded a figure of 56.9 for the month, up from May’s increase of 54.9 – significantly above the no-change figure of 50 and marking the highest rate of expansion for the sector since March 2011. The latest positive figure for the sector extends the run of growth six months.
Landmark activity was also recorded in new business, which grew faster than in any month since June 2007, and business confidence, which reached its highest level in 14 months. These factors produced a spike in both sales and production, putting pressure on capacity and helping to produce the sharpest rise in employment for almost six years.
The positive sentiment surrounding the month carried over into survey respondent’s future expectations, with many planning sales and production pushes to capitalise on fairer market conditions. Increased commodity, labour and food costs saw input prices accelerate for the month.
David Noble, CIPS CEO, said: “The UK services sector finished off Q2 with a stellar performance in June, giving the clearest signal yet that the worst days of the financial crisis are behind us. The UK’s largest industry recorded the fastest growth in new business for six years and the sharpest increase in employment over a similar period.”
Chris Williamson, chief economist at Markit, said: “Surging growth in the service sector accompanied a resurgent manufacturing sector and modest growth in construction in June for an increasingly broad-based economic upturn. Growth in services and manufacturing is now the strongest for just over two years, while the construction sector is enjoying the fastest pace of expansion for over a year.”