Employment in services industry increases for 40th consecutive month
The services industry continued to grow in December according to the Investec Purchasing Managers' Index (PMI), which showed increases in new business, backlog of work and employment levels.
The PMI revealed that new business and backlogs of work in the services industry grew for the 31st consecutive month while employment in the sector grew for the 40th consecutive month.
The overall headline reading fell from 63.6 for November to 61.8 for the month of December. Investec says that fall in the headline reading is amplified by the fact that November's reading was a five-month high.
Improving economic conditions and confidence among consumers helped companies to secure more new work.
Chief economist at Investec, Philip O'Sullivan said that says the latest PMI underlines the strong growth in the sector over the last two years.
"Within the survey we see evidence that improving conditions, both at home and abroad, are supporting growth in new business. The New Business index was little changed in December, while data for the components of the services sector that are captured by this report (Business Services, Financial Services, TMT and Transport & Leisure) show that all four simultaneously recorded growth in New Business for a 31st successive month," Mr O'Sullivan said.
Average input costs increased again in December. The rate of inflation eased slightly from the 88-month high seen in November 2015, but remained sharp and was faster than the series average.
"Services firms were able to defray at least some of this by hiking Average Prices Charged for a 21st successive month. In any event, the Profitability index shows continued improvements in sector earnings, albeit at a slower pace of growth than had been recorded in November," Mr O'Sullivan said.