Most contractors working through umbrella companies will share widespread concerns about the UK’s economic prospects in 2012, although those with experience in the service sector can at least draw some comfort from a new survey conducted by Markit and the Chartered Institute of Purchasing and Supply.
PAYE umbrella contractors working in the sector may already have noticed that demand has been keen in recent weeks, an impression confirmed by the survey, which shows that activity climbed healthily last month. In fact, in December, the sector saw its highest activity rate since July, according to the Purchasing Manager’s Indexes.
Other trends noted in the report include the first rise in growth for nine months across all three categories of the engineering sector (housing, commercial and civil engineering). Meanwhile, manufacturing managed to reverse the contraction it suffered in November, although it didn’t quite make it into positive growth during December.
Even so, hiring intentions and business expectations remain low, with those polled expressing about the same level of caution as during the two-and-a-half-year low recorded in September. This may well be to the advantage of the jobbing contractor, however, as businesses may prefer hiring skilled temporary workers to deal with specific projects rather than risk appointing permanent staff while economic conditions still look so choppy.
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.”