UK service sector activity recovers in January

| February 3, 2011 | 0 Comments
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Growth in the UK’s closely-watched service sector recovered in January - following the surprise contraction in December due to the disruption caused by bad weather.

The Chartered Institute of Purchasing and Supply (CIPS)/Markit purchasing managers’ index (PMI) grew at its fastest pace in 8 months to 54.5 in January, from December’s 20-month low of 49.7.

The latest figures mean the index is back above the crucial 50 level, which separates growth from contraction.

The figures also easily beat forecasts of 51.4.

Commenting on the index, Markit chief economist Chris Williamson, said: “The service sector rebounded in January as the country thawed out from the coldest December in a century.”

The survey covers businesses making up around 40% of the economy, but does not include retailers or the public sector.

The figures come shortly after the CIPS/Markit PMI index revealed construction activity also recovered in January.

The construction PMI The PMI rose to 53.7 in January, up from December’s 49.1 – which represented the first fall in 10 months - again, attributed to the severe wintry weather during the month.

January’s reading also easily beat forecasts of a level of 49.7.

Meanwhile, also this week, it was revealed UK manufacturing activity surged at a record pace in January.

The closely-watched CIPS/Markit manufacturing PMI jumped to 62.0 in January from December’s upwardly revised reading of 58.7.

Not only was the reading the highest since records began in 1992, it was well above forecasts of 57.9.

Again, this index continues to stay above the crucial 50 mark, which indicates expansion.

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