Ash clouds service sector growth

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The UK service sector continued to expand in April, but at a reduced rate as a number of temporary factors undermined increases in activity and new business, according to the Markit/CIPS purchasing managers index.

The headline business activity index remained positive in April, registering 55.3 (from 56.5 in March) and thereby signalling growth of UK service sector activity for a twelfth successive month.

However, amid some reports that the volcanic ash cloud had disrupted business operations – particularly in the transport, storage & communications sector – the rate of activity growth weakened for a second successive month to the slowest since January’s snow-related low.

The volcanic ash cloud was cited as undermining new business gains in April, while there were also reports that the general election had led to uncertainty among some clients. Despite easing to a three-month low, overall new business growth was solid.

David Noble, chief executive at the Chartered Institute of Purchasing & Supply, said: “We are finally starting to see a real turnaround in employment levels with the number of jobs growing at the strongest pace in over two years. This is hugely encouraging as an economic recovery without job growth is like a having a party with no guests invited.

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