Encouraging signs for UK economy

Activity in Britain’s service sector grew at its fastest pace since 1997 in the third quarter of 2013, according to the headline Markit/CIPS Purchasing Manager’s Index (PMI) for services.

The activity index for the sector recorded 60.3 in September, down marginally from August’s near seven-year high of 60.5. Any score above 50 indicates growth.

The sector saw jobs growth in September, repeated in surveys of manufacturing and construction earlier this week.

Chris Williamson, Chief Economist at survey compilers Markit, said; “Growth is being led by financial services  – linked in part to increased housing market activity – and the business sector”.

Approximately half of firms surveyed in the service sector, which accounts for more than three quarters of Britain’s output, expected even brisker trade in a year’s time, with the outlook index rising to 71.8.

Chief executive officer at the Chartered Institute of Purchasing & Supply, David Noble, commented “After nearly six lost years of economic output, the UK economy looks to have really found its feet.”

The industry sustained August’s impressive business growth, dipping only fractionally from a near seven-year high, and new orders have now been growing for nine months consecutively”.

Markit’s composite index, which combines surveys of services, manufacturing and construction, came in at 60.4 in September and averaged 60.2 over the third quarter – the fastest rate of quarterly growth since records began in 1998.

This suggests the economy expanded by 1.2 percent in the July-September period, Markit said.