The service-sector purchasing managers’ index for the UK comfortably exceeded expectations, rising to a record 62.5 in October from 60.3 in September. Activity is expanding at its fastest rate since May 1997. Taken together with the construction and manufacturing surveys, Markit says the numbers are consistent with GDP growth of more than 1% in the final quarter of 2013.
This is their assessment:
Chris Williamson, Chief Economist at survey compilers Markit: “The UK economic recovery moved up a gear again in October, with the PMIs indicating record growth of output and employment. The all-sector PMI, measuring business activity across the UK private sector economy, hit an all-time high of 61.5 in October, up from 60.2 in September.
“Historical comparisons of the PMI against gross domestic product suggest the latest survey data are consistent with a 1.3% quarterly rate of GDP growth, up sharply from previous quarters. The surveys also indicate that the rate of private sector job creation is currently running in excess of 100,000 per quarter.
“Manufacturing, services and construction all continued to see very strong rates of expansion, pointing to an ongoing broad-based upturn. However, it is the services sector which – due to its sheer size – is the major driving force behind
economic growth at the moment.
The service sector PMI is here.
This piece is cross-posted from EconomicsUK with permission.