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UK service sector grew far more than expected in January, PMI shows
Tue, 22 May, 2012
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UK service sector grew far more than expected in January, PMI shows
Fri, 3 Feb 2012, 11:34:00
The
Markit/CIPS
purchasing managers' index for the month of January has come in at 56 points, versus a reading of 54 for the month before. The consensus estimate was for a reading of 53. Particularly worth noting, business confidence registered the largest one month rise in the survey's history while the employment sub-index increased by the most in nearly four years. Likewise, the improvement seen in the headline business activity index, which marked the third consecutive monthly gain, the best run for over two years. Of particular interest, Markit reports that there was also evidence of improved confidence amongst clients and an increased willingness to commit to new work. As well, volumes of incoming new business grew by their strongest since last July. To be seen now is how the above data may influence the Bank of England's decision making process. Commenting on the data, David Noble, chief executive officer at the
Chartered Institute of Purchasing & Supply
said that, "compared to the volatility seen through most of last year, sustained and accelerated growth in the service sector is welcome news. A record improvement in the degree of optimism and the highest increase in employment in nearly four years represents a tentative vote of confidence for the year ahead. "Lower energy bills and overall weaker input cost inflation are also helping to ease the squeeze on margins and improve profitability across the sector as a whole. "This optimism, however, is accompanied by continued challenges. Unpredictable external factors across the Eurozone could well splinter confidence. And in a fiercely competitive business environment where clients are increasingly demanding more for less, the pressure to convert new business and carefully plan capacity is likely to be the test for businesses in 2012." AB
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