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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Recess confidential: Labour's liquid party

Sniffing out the best stories from Westminster, including Showsec, soames, and Smith-side splits.

If you are celebrating in a brewery, don’t ask Labour to provide the drinks. Because of the party’s continuing failure to secure a security contractor for its Liverpool conference, it is still uncertain whether the gathering will take place at all. Since boycotting G4S, the usual supplier, over its links with Israeli prisons, Labour has struggled to find an alternative. Of the five firms approached, only one – Showsec – offered its services. But the company’s non-union-recognition policy is inhibiting an agreement. The GMB, the firm’s antagonist, has threatened to picket the conference if Showsec is awarded the contract. In lieu of a breakthrough, sources suggest two alternatives: the police (at a cost of £59.65 per constable per hour), or the suspension of the G4S boycott. “We’ll soon find out which the Corbynites dislike the least,” an MP jested. Another feared that the Tories’ attack lines will write themselves: “How can Labour be trusted with national security if it can’t organise its own?”

Farewell, then, to Respect. The left-wing party founded in 2004 and joined by George Galloway after his expulsion from Labour has officially deregistered itself.

“We support Corbyn’s Labour Party,” the former MP explained, urging his 522,000 Facebook followers to sign up. “The Labour Party does not belong to one man,” replied Jess Phillips MP, who also pointed out in the same tweet that Respect had “massively failed”. Galloway, who won 1.4 per cent of the vote in this year’s London mayoral election, insists that he is not seeking to return to Labour. But he would surely be welcomed by Jeremy Corbyn’s director of communications, Seumas Milne, whom he once described as his “closest friend”. “We have spoken almost daily for 30 years,” Galloway boasted.

After Young Labour’s national committee voted to endorse Corbyn, its members were aggrieved to learn that they would not be permitted to promote his candidacy unless Owen Smith was given equal treatment. The leader’s supporters curse more “dirty tricks” from the Smith-sympathetic party machine.

Word reaches your mole of a Smith-side split between the ex-shadow cabinet ministers Lisa Nandy and Lucy Powell. The former is said to be encouraging the challenger’s left-wing platform, while the latter believes that he should make a more centrist pitch. If, as expected, Smith is beaten by Corbyn, it’s not only the divisions between the leader and his opponents that will be worth watching.

Nicholas Soames, the Tory grandee, has been slimming down – so much so, that he was congratulated by Tom Watson, Labour’s deputy leader, on his weight loss. “Soon I’ll be able to give you my old suits!” Soames told the similarly rotund Watson. 

Kevin Maguire is away

I'm a mole, innit.

This article first appeared in the 25 August 2016 issue of the New Statesman, Cameron: the legacy of a loser