Service sector shows sharp easing of activity growth

5 November 2007
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05 November 2007 | Antony Barton

The UK service sector experienced a rapid deceleration in activity growth and new business growth last month. Business expectations also fell to their lowest level since August 2006.

The CIPS/NTC Purchasing Managers' Index for October, where a figure above 50 represents growth, recorded a score of 53.1, down from 56.7 in September. This was the weakest rate of activity growth since May 2003.

Although 27 per cent of companies reported that growth of activity levels had been sustained through rising sales, marketing and new products, 22 per cent said they had been affected by market uncertainty and weaker demand.

New orders also increased at the slowest pace since May 2003, falling to 54.2 from 57.5 in September. Companies again blamed increased market uncertainty, which they said led to fewer order enquiries than in previous months. Some said a slowdown in the housing market and recent postal strikes contributed to weakened growth.

The business expectations index, which records how businesses expect their service activity to perform in 12 months' time, fell from 72.0 to 71.5.

* Further coverage of PMI reports is available at http://www.supplymanagement.com/pmi



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