"The UK service sector turned in another stellar performance in August, building on the growth momentum seen during July"
- Paul Smith, senior economist at survey compiler Markit
A rush of new companies in August drove the fastest growth in the U.K. services sector for more than six years, survey from Markit showed Wednesday, challenging official cautious estimates. A gauge of activity in services sector soared to 60.5 in August, up from 60.2 a month earlier, hitting the highest since December 2006, and far above the 50 threshold. Analysts, however, expected a slight deceleration, projecting services PMI at 59.0. Moreover, the backlogs of work are running at the highest in more than 13 years. However, even despite the extra work, the total number of people in employment inched higher just slightly. This was the eight straight month of expansion, suggesting the sector is strengthening following subdued output after the financial crisis five years ago.
With construction PMI at six-year high, manufacturing PMI hitting the 16-month high and now activity at services sector at the highest level in six years, are all cementing expectations of a stronger growth in the coming months. Meanwhile, services sector accounts for almost 77% of the overall economy, and the fact it increased 0.6% in the second quarter, contributed most to the 0.7% expansion in the economic output over the same period.
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