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4 September 2013 | Paul Snell
Activity in the UK services sector grew at its fastest rate since December 2006 last month, and new business growth was the strongest in 16 years, according to the Purchasing Managers’ Index (PMI).
The Markit/CIPS UK Services PMI for August recorded a figure of 60.5, a slight increase compared with the 60.2 reading posted in July, and well above the 50 mark, which indicates no change.
The rapid expansion was attributed to increased market confidence, which has helped companies turn enquiries into new contracts. Marketing and an improved housing sector were also cited as a factor for higher sales volumes.
Employment, work backlogs and output charges also all increased as a result of the sector’s strong performance.
And in further positive news for purchasers, input price inflation was at its slowest since May. Utilities, fuel and food prices were all contributors to the rise in prices.
CIPS CEO David Noble said: “Optimism abounds as the UK services sector, combined with manufacturing and construction, completes a glowing picture for the UK economy.”
Paul Smith, senior economist at Markit, said: “The UK is well on course to register a strengthening of GDP growth over quarter three as a whole following the 0.7 per cent quarter-on-quarter increase in the second quarter.”