UK service industry rebounds after snowy January

Britain's service industries bounced back strongly last month after the disruption caused by January's wintry weather, suggesting that the UK economic recovery is gathering pace.

The dominant service sector expanded at its fastest pace in more than three years in February, data released this morning showed. This follows last week's news that the economy grew by a faster-than-expected 0.3% in the fourth quarter when it came out of its longest and deepest recession on record.

Vicky Redwood of Capital Economics said together with strong growth in manufacturing and construction last month, the services outturn points to overall economic growth of 1% in the first three months of 2010. "At the very least the survey will ease concerns that the economy may have fallen back into recession this quarter," she said.

The closely watched purchasing managers index (PMI), compiled by the Chartered Institute of Purchasing and Supply/Markit to measure service sector activity, jumped to 58.4 in February from 54.5 in January, when heavy snow brought large parts of the country to a standstill. This more than reversed January's drop and marked the highest outturn since the start of 2007.

"The latest data confirms that the underlying trend in the private service sector remains positive and is on course to deliver a quarterly expansion above 1% in the first quarter," said Paul Smith of Markit. "When combined with the positive manufacturing results, February's PMI surveys augur well for the economy to build on the momentum of exiting recession in the fourth quarter."

A sub-index measuring new business in services increased to 57.5 from 53.4, the highest since September 2007. Encouragingly, job prospects improved in the service sector, with the employment reading the highest since April 2008. Price pressures also picked up, with prices rising at their fastest rate since October 2008.

Posted at 08:29PM Mar 03, 2010 by Kelly Board in UK Economy News  |  Comments[0]

Job Market Steadily Improving

The UK job market has continued to improve and has now shown its largest growth in permanent staff positions since July 2007, according to a new report.

This comes from a study done by the Recruitment and Employment Confederation and KPMG, they have said that more full time jobs were added over the past month than at any point in two and a half years previous to that.

On a more negative note, the report has shown that temporary positions, although continuing to increase, have grown at their slowest rate for three months.

 It has also said that they are expecting that incoming plans to cut public sector jobs may have an impact on the wider economy.

The IT sector along with engineering and construction have shown themselves to be leading the way in the creation of new jobs, the report has said these sector are ‘clearly on the rebound.’

"The latest figures seem to confirm that the UK jobs market is on the road to recovery," said KPMG's head of business services, Bernard Brown.

"However, this all comes with one big warning - the impact of the inevitable public sector recession on the jobs market has yet to be felt, and will be played out over the next six months."

The report has been compiled after speaking to 400 employment consultancies about the recent trends in the market.

Furthermore, the report has shown that there has now been a growth recorded for five consecutive months.

Posted at 02:06PM Mar 03, 2010 by Marc Stenton in UK Economy News  |  Comments[0]