Strong services data for July indicates health in the sector

The services PMI for July came in at 60.2.

Market Economics has released the purchasing managers' index data for the services sector in the month of July. It shows a sharp increase in activity in the sector, dominant in the UK economy: the index stands at 60.2, well above the 57.2 forecast. It is the best growth services have seen since 2006.

The PMI is compiled from data contributed by purchasing managers across Britain, and values of above 50 represent increasing growth in the sector, while values below represent increasing contraction. A value of 60.2 thus represents extremely strong growth for the services sector; and, given the strength of that sector in the national economy, bodes well for overall growth in the third quarter of 2013.

The below chart shows quite how high the reading was, and also how well the PMI data – an incomplete but speedy measure based on survey data – tracks the ONS's official estimate of the sector.

Today's release follows that of the PMIs for the construction and manufacturing sectors, each similarly strong. The former came in at 57.0, up from 51.0 in June, while the latter came in at 54.6, up from 52.9 the month before. Both of those figures represent the fastest growth in their sectors for years, and indicated that the slump is well and truly coming to an end. Markit's chief economist, Paul Smith, says that the service sector "appears to have genuine momentum". "Although an early call on one month's data," he adds, "the forward-looking elements from the survey point to a further strengthening of GDP in Q3 as the UK heads towards 'escape velocity' and self-sustaining economic expansion."

Those forward-looking elements include measures of backlogs in orders, as well as questions of business confidence. Backlogs, which indicate pressure on companies to expand their production, had the sharpest rise since February 2000, and have now risen four months in a row. Business confidence also strengthened, to its highest level for over a year, although that still leaves it well below even the burst in optimism immediately following the recession, let alone the typical sensibility in the mid-2000s.

The pound saw a slight boost following the release of the news, rising against the dollar from 1.532 to 1.535.

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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How tribunal fees silenced low-paid workers: “it was more than I earned in a month”

The government was forced to scrap them after losing a Supreme Court case.

How much of a barrier were employment tribunal fees to low-paid workers? Ask Elaine Janes. “Bringing up six children, I didn’t have £20 spare. Every penny was spent on my children – £250 to me would have been a lot of money. My priorities would have been keeping a roof over my head.”

That fee – £250 – is what the government has been charging a woman who wants to challenge their employer, as Janes did, to pay them the same as men of a similar skills category. As for the £950 to pay for the actual hearing? “That’s probably more than I earned a month.”

Janes did go to a tribunal, but only because she was supported by Unison, her trade union. She has won her claim, although the final compensation is still being worked out. But it’s not just about the money. “It’s about justice, really,” she says. “I think everybody should be paid equally. I don’t see why a man who is doing the equivalent job to what I was doing should earn two to three times more than I was.” She believes that by setting a fee of £950, the government “wouldn’t have even begun to understand” how much it disempowered low-paid workers.

She has a point. The Taylor Review on working practices noted the sharp decline in tribunal cases after fees were introduced in 2013, and that the claimant could pay £1,200 upfront in fees, only to have their case dismissed on a technical point of their employment status. “We believe that this is unfair,” the report said. It added: "There can be no doubt that the introduction of fees has resulted in a significant reduction in the number of cases brought."

Now, the government has been forced to concede. On Wednesday, the Supreme Court ruled in favour of Unison’s argument that the government acted unlawfully in introducing the fees. The judges said fees were set so high, they had “a deterrent effect upon discrimination claims” and put off more genuine cases than the flimsy claims the government was trying to deter.

Shortly after the judgement, the Ministry of Justice said it would stop charging employment tribunal fees immediately and refund those who had paid. This bill could amount to £27m, according to Unison estimates. 

As for Janes, she hopes low-paid workers will feel more confident to challenge unfair work practices. “For people in the future it is good news,” she says. “It gives everybody the chance to make that claim.” 

Julia Rampen is the digital news editor of the New Statesman (previously editor of The Staggers, The New Statesman's online rolling politics blog). She has also been deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.