05/08/2011
Good news for the service sector - growth in the industry unexpectedly rose to a four-month high in July, embarrassing analysts who predicted doom and gloom, reports Guardian.
The CIPS/Markit Purchasing Managers' Index for services recorded 55.4, up from 53.9 in June. any figure above 50 denotes growth, so the sector seems to be expanding at an accelerated rate. City economists had predicted a slowdown to 53.2, due to lingering uncertainty over the economy but it seems the services sector has proved naysayers wrong.
Markit told ShareCast that activity was supported by an "equally strong gain in new business as demand and market conditions were reported to have improved."
In addition, Business Services and IT & Computing registered the steepest gains in activity, according to the Index.
Growth could come from a number of avenues such as increased trading and recruitment. Businesses can stimulate further growth in the sector by utilising sales finance to free up cash trapped in unpaid invoices.
Taken together with the manufacturing survey earlier this week, Britain's economy grew 0.5 in the three months to July.
Dr Howard Archer, chief UK economist at IHS Global Insight, expressed his delight at the figures, calling them "a welcome antidote to a recent flurry of disappointing data and surveys".
"It is particularly welcome given the dominant role of the services sector," he added.
Ashley Curtis