05 July 2006 | Rebecca Ellinor

Gains in new business and sustained marketing were among the reasons cited for the continued growth of the UK services sector in June.

The CIPS/RBS Purchasing Managers' Index (PMI) - in which an index above 50 indicates growth - recorded a reading of 58.7, down only slightly from May's figure of 59.2.

Growth has now been maintained for 39 months and the rising workload has led companies to increase workforces. The employment index posted a reading of 54.6, the sharpest rate of increase for nearly eight years.

Cost pressures intensified for UK service providers in June with the rate of input cost inflation rising to its strongest in 19 months. The input prices index posted a reading of 61.9. In response to this, output charges increased. The output charges index came in at 54.2.

UK service providers remained optimistic overall that business activity would rise from present levels in a year's time, though worries over future inflation led the business expectations index to record its lowest reading in three months, of 73.1.

Coverage of previous PMI reports is available at www.supplymanagement.com/pmi

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