The UK’s service sector has shown continued improvement, according to the CIPS/Markit index for December.

After accounting for seasonal factors, the CIPS/Markit Business Activity Index posted a reading of 56.8, up slightly from 56.6 in November.

Activity and new business showed continued growth, while backlogs and employment fell at slower rates.

Paul Smith, senior economist at Markit Economics, says: “December’s data confirmed that the UK service sector recorded robust growth during the final quarter of 2009, remaining consistent with a quarterly expansion on the official measure of above 1%.  With new business rising at the strongest pace since September 2007 and expectations relatively high, the fundamentals remain in place for further solid gains in activity at least in the near-term.

“On the jobs front, private sector services employment moved closer to stabilisation, with the rate of job shedding the weakest for nearly a year-and-a-half. While this continues to support the view of an earlier-than-expected peak in overall joblessness, focus in 2010 is likely to increasingly shift to the public sector where expected austerity will inevitably impact on aggregate jobs and pay.”

Kate McCarthy, managing director at retail and hospitality recruiter McCarthy Recruitment, told Recruiter: “We have witnessed a big increase in turnover in the last eight weeks. There has been an increase in confidence in the market place.

“Companies stopped recruiting but there is now more movement in the marketplace. People have stayed in jobs in the marketplace in which they are unhappy and are now looking to move.

“Employers need to be looking at succession planning in case key players leave the business. Companies that have frozen recruitment want people quickly.”