Confidence at services firms hits 7-year high

The Investec Services PMI has reported the fastest rise in new orders since Mar 2007 with services companies reporting that their confidence has hit a seven-year high.

Investec chief economist Philip O’Sullivan said there had been a slight fall in activity but the services industry was still growing.

“Although the rate of growth in business activity (57.1) slowed from the previous month (60.1), it remained higher than the series average. The services sector has now recorded growth for 16 consecutive months and with confidence improving to a seven-year high during November, it is likely to continue to do so for the foreseeable future,” he said.

The main driver of growth and confidence in the survey was new orders coming from abroad, in particular from the UK, which has led to firms hiring more staff.

“Growth in new orders accelerated during the month, on the back of increased new export orders. As before, the UK was cited as a key source of new export business. Increased workloads led firms to increase staffing levels for the 15th month in a row,” said Mr O’Sullivan.

The positive reports from the services sector further reinforce the good news that has been emerging about the economy in recent days.

“For some months now we have been expressing confidence that growth will accelerate into 2014 on the back of a stabilising domestic economy and improving export markets; today’s report leads us to reiterate that view,” said Mr O’Sullivan.