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Services sector shows signs of continuing growth

Indications that the UK economy is emerging from recession were reinforced by new figures detailing an upturn in growth in the services industry.

According to the Chartered Institute of Purchasing and Supply (CIPS), the service sector’s business activity index climbed from 56.6 in November to 56.8 last month.

The index has been registering expansion for eight consecutive months now, and the latest data suggest that a fall in outstanding business has been more than compensated for by a surge in new business.

The new mark is 1.5 above its average level, and analysts noted that the new business gains were based on a broad front. Output and input prices also signalled a distinct improvement on the November figures.

David Noble, the CIPS chief executive, said: “Last year saw the UK service sector recover at an extraordinary rate and end 2009 on a high. This was on the back of stronger economic activity, new business wins — especially among larger companies — and growing client confidence.

“As the biggest contributor to the UK economy, services is undoubtedly heralding the way for wider economic growth in 2010.”