July’s Purchasing Managers’ Index (PMI) data present a worrying mix of results, CIPS director of customer relations has said.
The UK service sector – the last of July’s results to be released – showed growth rates had increased to only slight above the nine-month low recorded in June. The IHS Markit/CIPS UK Services PMI rose to 53.8 in July, up from 53.4 in June and above the no-change score of 50.
The release of the service sector PMI completes the trio for July, in which the construction sector experienced a slowdown in growth and the manufacturing sector a slight uptick.
Duncan Brock, director of customer relationships at CIPS, said: “July’s data has presented a worryingly mixed bag of results reaffirming the impact economic uncertainty and the weak pound can have.”
Chris Williamson, chief business economist at IHS Markit, said taken together the three PMI surveys reflect economic growth of just over 0.3%. “[This puts] the country on course for another steady but sluggish expansion in the third quarter,” he said.
Buyers in the service sector cited ongoing ambiguity around Brexit and concerns over strength of the economy as responsible for the muted performance, as consumers and businesses hesitate over spending.
Rising food prices, energy bills and salaries also kept inflation rates on the sector’s input cost strong, leading to higher operating costs and the fastest increase in prices charged by the sector for three months.
Employment figures in the sector faired well, with staff recruitment reaching its highest level since the beginning of 2016. But overall business expectations for the year ahead remained weak and were at their lowest since late 2012.
“Hopes of a stronger performance in the latter half of the year are ebbing away,” said Brock.
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