PAYE Umbrella Contractors in Service Sector See Rise in Activity

While most PAYE umbrella contractors will be hoping that economic conditions will improve in 2012, the continuing pall of gloom hanging over the Eurozone is hardly likely to induce much optimism. Even so, umbrella companies supplying contractors to the service sector may well have noticed encouraging signs of healthy demand in recent weeks.

They wouldn’t be mistaken. The latest Purchasing Managers Indexes, compiled by Markit and the Chartered Institute of Purchasing and Supply, reveals that activity levels in the sector during December hit their highest peak since July last year. Not only this, but during the same month, the engineering sector also saw growth in all three of its categories (commercial, housing and civil engineering) – the first time such a ‘growth hat trick’ has been recorded in nine months. Manufacturing can draw some comfort from the fact that it managed to reverse the decline seen in November, although this wasn’t robust enough (as yet) to translate into positive growth.

Business expectations (including hiring intentions) remain muted, however, with respondents conveying the same level of caution as in September, which marked a two-and-a-half year low in confidence. Placement-hunting contractors needn’t be unduly perturbed by this, however – companies are more likely to hire skilled flexible workers during economically precarious times than risk appointing permanent staff.

Commenting in the survey, Markit’s chief economist Chris Williamson said:

“Service sector companies reported surprisingly buoyant business conditions in December, with activity and new business growing at the strongest rates since July. The December survey rounds off a reasonable fourth quarter for the service sector, which is likely to again provide the main stimulus to overall economic growth.”

Sources:

http://www.brookson.co.uk/news/industry/2012/january/uk-service-sector-activity-on-the-rise/

http://www.contractorcalculator.co.uk/contractorcalculator_contracting_news_060112_403510_news.aspx