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Service sector sees staff numbers rise due to expansion expectations

04 August 2017

An increase in business activity within the service sector will be welcomed, following reports of reduced construction activity and warnings about the UK economy from the Bank of England.

Results from the IHS Markit/CPS UK Services PMI report shows that July saw an increase in activity, rising to 53.8 from the previous month's figure of 53.4.

Although June saw a nine-month low, July was the twelfth consecutive month to remain above 50 and job creation rose to the highest level for 18 months.

The increase in staff numbers was attributed to rising business requirements and expansion plans. and was reported to have eased pressure on operating capacity for some companies.

New business expansion for July was described as "solid", despite the fact that concerns over the economy and low confidence levels among clients had been a constricting influence.

Rising costs, particularly of food prices, energy bills and salary payments, had seen the fastest increase in average prices for three months.

Commenting on the report, KPMG UK head of business services Justin Zatouroff said: "Despite input price inflation and difficulties in finding staff with the right skills affecting the wider performance of the UK economy, the services sector continues to employ more people and see continued growth in revenue.

"However, the ongoing political and economic uncertainty continues to erode confidence inthe future performance of the sector," he said.

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