Services sector slumps on war fears

9 April 2003
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10 April 2003 | Robin Parker

Fears of the impact of the Iraq war are taking their toll on the retail and construction industries, the latest economic figures reveal.

Activity in the services sector declined in March for the first time since December 2001, according to the CIPS/NTC Research Purchasing Managers' Index (PMI), which fell to 49, below the 50 mark that indicates no change.

Purchasers were at their most pessimistic for 16 months, as firms increasingly deferred spending until they could assess the war's economic impact.

The Confederation of British Industry said high-street stores suffered the first year-on-year drop in sales for four years.

Shops where sales fell outnumbered those that saw them grow more than at any time in 11 years.

Stocks were at their lowest level in nearly two years as shops cut orders with suppliers for the third month in a row.

Roy Ayliffe, director of professional practice at CIPS, said: "The sector has been struggling to grow for the past few months, and the outbreak of war has finally got the better of it."

The PMI for the construction sector had the slowest rate of activity in 15 months.


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