Report says services industry fell for second consecutive month

The Advertiser Series: The transport industry fared well in the fourth quarter, according to the latest Markit/CIPS purchasing managers' index report The transport industry fared well in the fourth quarter, according to the latest Markit/CIPS purchasing managers' index report

GROWTH in the UK's services sector slipped to a six-month low as the pace of economic recovery slowed, a new report has revealed.

The closely-watched Markit/CIPS purchasing managers' index (PMI) says the industry fell for a second consecutive month in December.

The report gave a reading of 58.8, which is still ahead of 50, the figure that separates growth from contraction.

However, it said the services sector, which represents about three-quarters of the economy, mirrors similar trends in manufacturing and construction, which lost momentum in December after strong performances in previous months.

But it did add market confidence remained high, with firm's new products and increased marketing bolstering sales and new customers.

It also highlighted strong fourth quarter expansion across computing and IT and transport and communication.

Chris Williamson, Markit chief economist, said while optimism remained high, further growth could slow in the coming months.

He said: “Service providers ended 2013 in a buoyant mood.

“Although growth of business activity slowed, it’s come down from super-strong levels and the pace of expansion remains elevated.

“More strong growth looks likely as we move into 2014.

“Optimism about the year ahead hit the highest since early 2010 and growth of new orders remains reassuringly robust across all three sectors.

“However, it is perhaps inevitable that we may see the rate of growth slow compared with the unusually strong pace seen in recent months.

“The weakest sectors were hotels and restaurants and personal services, and while these sectors have seen decent growth, their under performance is another reminder that this is not purely a consumer and housing driven boom that we are currently seeing.”

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