UK services sector growth eases but Scottish referendum result has boosted confidence

Will Green is news editor of Supply Management
3 October 2014

Growth in the UK services sector has slipped to a three-month low but confidence has been boosted by the result of the Scottish independence referendum result, according to a survey of buyers.

The Markit/CIPS UK Services Purchasing Managers’ Index dropped to 58.7 in September, compared to 60.5 in August, against a baseline of 50 that indicates zero growth.

However, new business volumes continued to increase and demand was reported to be strong, with some reporting the Scottish referendum result to be a boost to business confidence.

Capacity remained under pressure with levels of work outstanding continuing to increase and some respondents reported difficulties sourcing goods from suppliers.

Employment increased for the 21st month in succession, with a fifth of the survey panel reporting a rise in payroll numbers, leading to higher wage bills and an increase in supplier prices.

Chris Williamson, chief economist at Markit, said: “September’s PMI surveys suggest that the UK most likely enjoyed another spell of above-trend economic growth in the third quarter, but the recovery appears to be losing its legs.”

David Noble, group CEO, CIPS, said: “While not hitting the heights of August’s exceptionally high growth rate, services businesses still expanded rapidly in September.

“Many businesses reported that the Scottish independence referendum result has had a positive impact by increasing their confidence in the stability of the business environment.”

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