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3 November 2011 | Adam Leach
Activity increased for the 10th
consecutive month in the UK services sector but at a slower rate, buyers report.
The Markit/CIPS UK Services PMI for
October showed activity had declined from 52.9 in September to 51.3. It also
recorded a rise in new business orders, but again, at a slower rate, prompting
CIPS CEO David Noble to describe overall performance as “sluggish at best”.
The declining growth is
particularly significant because prices were cut, with the overall average
output price dropping.
The sector fared better on
confidence levels, rising from the two-and-a-half-year low recorded in
September. Buyers can also take heart from the fact that input price inflation
continued to ease, hitting the lowest rate for almost a year.
Noble said: “The crisis in the
Eurozone is keeping everyone on the edge of their seats and raising levels of
uncertainty and anxiety in the UK services sector. Growth in the sector is
sluggish at best and general business confidence is subdued, resulting in a
softer trend in demand. Pressure on pricing has forced businesses to engage in
discounting for the first time in 13 months.”
Chris Williamson, chief economist
at Markit, said: “Another rather disappointing survey adds to fears that the UK
recovery continued to lose momentum at the start of the fourth quarter… With
manufacturing contracting, the October PMI surveys are signaling a heightened
and substantial risk that the UK could slip back into recession.”