Service sector PMIs still slowing

4 March 2009

04 March 2009 | Martha McKenzie-Minifie

Employment in the UK service sector continues to fall, according to the latest PMIs.

The February CIPS/Markit UK Services PMI - released this morning - recorded falling employment levels for the tenth successive month. The employment index figure was 40.4 in February and has been under 41 for three consecutive months, the lowest in the index's history.

It also indicated drops in activity and new orders but the rates of decline eased from the records set in November.

The Business Activity Index - where a figure below 50 represents contraction - was 43.2 for the UK service sector last month, compared with 42.5 a month earlier. In February last year it was 54.

Markit senior economist Paul Smith said: "The latest data provides hope that the UK service sector is past the worst point in its downturn."

Expectations among the survey panel improved, with a bigger proportion forecasting growth in activity in a year's time.

Input costs - the price paid for supplies such as food and fuel - continued to rise but went up only slightly and at the slowest rate in the survey's history.

Companies also reported the weak stirling had continued to raise the cost of some imported goods.

In contrast, prices charged dropped as companies responded to intense market competition and poor demand.

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



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