9th January 2012

Umbrella company contractors could benefit from service sector growth

Growth in the service sector could benefit umbrella company contractors working in this area.

According to a recent report from Markit and the Chartered Institute of Purchasing and Supply, activity continued to rise last month as activity in December reached the fastest rate seen since July.

However, there was a still a certain level of caution seen among businesses, which would bode well for contractors as they represent a lower level of commitment than their permanent counterparts.

Indeed, data from the report revealed that business expectations in the last month of the year matched the two and a half year low recorded in September.

Chris Williamson, chief economist at Markit, commented: "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."

The headline business activity index of the services survey rose from 52.1 to 54 over the course of the month and follows similar improvements in the manufacturing and construction surveys.