GROWTH of the UK's dominant services sector accelerated in January, after slowing sharply in December, but remained well adrift of rates recorded last summer, a survey has shown.
The report, published yesterday by the Chartered Institute of Purchasing and Supply, also signalled the rate of increase of the service sector workforce accelerated last month to the joint second-fastest since the survey began in 1996.
CIPS's business activity index for services rose from 55.8 in December to 57.2 in January on a seasonally-adjusted basis, remaining well above the level of 50 which separates expansion from contraction and thus continuing to signal significant growth.
However, the index was adrift of the reading of 58.6 for November. And the services business activity index was above 60 as recently as last August.
Chris Williamson, chief economist at CIPS survey compiler Markit, said a weighted average of the output indices in reports this week on the January activity of the UK manufacturing, construction and services sectors was consistent with gross domestic product growing at a quarterly rate of slightly more than 0.5 per cent.
Although this represents a significant slowdown from growth rates recorded by the UK last year, Mr Williamson declared the January surveys signalled a "reassuringly robust" start to the year.
He was particularly encouraged by signs of a strong rate of job creation.
Mr Williamson said: "Growth picked up in services, manufacturing and construction in January, but it's clear from the surveys that the economy remains dependent on the vast service sector to sustain even the more subdued growth rate seen in recent months."
David Noble, chief executive officer at CIPS, said: "Staff recruitment levels...reflected business optimism for the future and not just for the fulfilment of backlogs and new orders arriving.
"Some firms are also offering higher salaries for the right candidates to counteract the skills shortages experienced by some, as the dangers of increasing backlogs are still ever-present if firms are unable to recruit the right people, at the right time."
Howard Archer, chief UK economist at consultancy IHS Global Insight, said: "The purchasing managers' surveys indicate that the UK economy has made a solid start to 2015, even if growth remains below the peak levels seen around mid-2014."
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