Ekonomické zprávy
03.11.2021

UK service sector recovery gains momentum in October

According to the report from IHS Markit / CIPS, UK service providers indicated a sharp and accelerated rise in business activity during October. This was driven by the strongest increase in new work since June. The reopening of the economy and looser international travel restrictions helped to boost demand, with new export sales rising at the fastest pace for just over three years. Stronger demand, staff shortages and stretched supply chains all contributed to a spike in inflationary pressures during October. Both operating expenses and prices charged by service providers increased at the steepest rates since the survey began in July 1996.

At 59.1 in October, up from 55.4 in September, the headline seasonally adjusted UK Services PMI signalled the strongest pace of recovery since July.

Survey respondents often commented on rising business and consumer spending in response to the roll back of pandemic restrictions at home and abroad. Measured overall, the latest increase in new order volumes was the steepest for four months. The recovery in new work from abroad gained momentum in October and, although only modest, the rate of expansion was the fastest since June 2018.

Around 30% of the survey panel reported an increase in employment numbers during October, while only 13% signalled a reduction. The resulting index pointed to the second-fastest rise in workforce levels since June 2014. 

Concerns about escalating cost pressures and a prolonged period of supply constraints acted as a brake on business optimism in October. The degree of positive sentiment about the year ahead growth outlook eased for the second month running to its lowest since January.

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