Hiring at highest level since 1997 as services grow

BRITISH services companies confirmed another buoyant month yesterday, with the most rapid staffing increases in 17 years reported this May, and no slowdown to the sector’s speedy recovery in sight.

Markit and the Chartered Institute of Purchasing & Supply’s latest purchasing managers’ index (PMI) came in at 58.6, nearly unchanged from the previous month. The part of the index which monitors employment was at its highest level since 1997.

The latest economic review from the Office for National Statistics (ONS), which was also released yesterday, helped to show the effect of the labour market’s dramatic turnaround.

The employment rate for 16-64 year olds has now returned to its 2000-2007 average level, at 72.7 per cent, even though firms are still voicing their intentions to continue hiring.

Despite pressure from a strong pound and weak wages, Deutsche Bank’s George Buckley notes that “there has been little evidence of any slowdown in the pace of growth at all.”

Christian Schulz of Berenberg added: “The UK economic engine keeps running red hot. Services and construction PMIs may have fallen a bit below their peaks in recent months, but the speed of the economic recovery remains very impressive. There is no evidence that it is about to slow significantly.”