There was further positive performance in the services sector in the UK last month, with Q3 2013 seeing better performance than any quarter this side of 1997, the latest Markit/CIPS UK Services Purchasing Managers Index (PMI) shows.

According to the data, which was released last week, the Business Activity Index was 60.3, which was just a little below the 60.5 seen the previous month, itself a higher level than had been seen for close to seven years.

There has now been continuous growth over a period of nine months.

The panelists taking part in the research said that, with a strengthening of business confidence came an improvement in underlying market demand. As a result, clients were more willing to start new contracts.

When it came to new work, there was growth, with the rise just a little below that seen the previous month.

A sharp hike for new business strained resources for companies, the report says, which the fact that backlogs increased shows. Outstanding work was at a higher level than has been seen this side of early 2000.

There was an acceleration in the growth of employment, with the rate just a little under than seen in June, when it was at a particularly high level for recent times.

Half of panelists predicted activity would be up from the levels it’s at now this time next year.

Meanwhile, operating costs were up again, mainly driven by utilities and fuel costs.

“Businesses in the vast service sector reported an ongoing growth spurt in September, expanding at a rate just shy of August’s recent high. The buoyant data follow similar upbeat surveys of the manufacturing and construction sectors, and collectively the surveys suggest the economy will have expanded by as much as 1.2%

in the third quarter; its fastest growth rate since the pre-crisis days of 2007,” commented Markit’s Chris Williamson.

Financial services, as well as the business sector, were leading growth, he said. Services of a consumer-facing nature were still struggling, which reflected “the ongoing squeeze on incomes due to weak pay growth and high inflation.”

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