05 August 2008 | Jake Kanter
Activity in the services sector continued to contract in July, but at a slower rate than the month before.
According to the latest CIPS/Markit Purchasing Managers' Index for services, the sector recorded a figure of 47.4 in July, below the 50 no-change mark for the third month running. In June the index posted a figure of 47.1.
A lack of market confidence and economic uncertainty meant new orders dropped to 44.7, compared with 45.1 the month before. The hospitality industry and financial services firms were hit hardest by the downturn in activity.
This affected employment levels, which fell from 47.6 in June, to register 46.6. Most staff cuts were seen in the hospitality sector.
There was a gloomy outlook for future business. Although activity increased, recording a figure of 56.1, this was the lowest point in the survey's 12-year history. In June the figure was 59.4.
Input costs eased slightly, but still rose to register 70.2. Fuel and food prices were largely to blame, while suppliers were also passing on high costs.
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