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5 December 2012 | Adam Leach
The UK services sector recorded its first decline in new orders for 23 months in November as gloomy economic conditions continued to take their toll on customer activity.
The Markit/CIPS UK Services PMI, published today, reported that overall activity in the sector had marginally increased. The report, which surveys buyers in the sector, recorded a figure of 50.2 for November, and a figure above 50 indicates growth. However, this rate of growth was a decline from October’s figure of 50.6.
Chris Williamson, chief economist at Markit, said: “Growth of business activity in the sector ground almost to a halt in November. Coming on the back of disappointing surveys of manufacturing and construction, it adds to worrying signs that the economy faces a renewed slide back into contraction after the temporary growth surge seen in the third quarter.”
Today’s results indicate the sector has hit a significant slump, with activity and sentiment dropping to the lowest levels seen for a significant period of time. Business activity, while rising, did so at the slowest rate for 23 months, new business volumes were down for the first time since December 2010, and confidence in the sector fell to an 11-month low.
CIPS CEO David Noble, said: “The services sector is in a state of stagnation with activity growth at its lowest for almost two years and businesses fearful of the direction of the economy. This has been compounded by concerns over public sector spending, leaving confidence fragile and momentum in short supply.”