The UK service sector continued to log strong recovery in November driven by the fastest rise in new business intakes for five months, final data from IHS Markit showed on Friday.
The Chartered Institute of Procurement & Supply services Purchasing Managers' Index dropped to 58.5 in November from October's three-month high of 59.1. The flash reading was 58.6. As a result, output growth in the final quarter of 2021 remained well on track to exceed that seen in the third quarter.
New business growth was the strongest since June underpinned by strong business and consumer spending. Export sales gained momentum, with the rate of growth the steepest for over four-and-a-half years.
Service providers continued to indicate robust demand for staff in November, with employment numbers rising for the ninth consecutive month.
Meanwhile, imbalance demand and supply contributed to another build up of unfinished work in November. Data pointed to surging input costs as suppliers passed on higher raw material prices and transportation bills. The latest rise in input prices was the strongest in 25 years of data collection. Prices charged by service sector firms also rose at a survey record pace in November.
The degree of optimism about business activity growth was the lowest for 12 months. At 57.6 in November, the composite output index dipped slightly from 57.8 in October but remained above the 50.0 no-change threshold for the ninth consecutive month. The flash score was 57.7.
The vast majority of survey responses in November were received prior to the news of the Omicron variant, however, which has the potential to derail near-term growth prospects and add to international supply chain disruption, Tim Moore, economics director at IHS Markit, said.