The Markit/CIPS Purchasing Managers’ Index® (PMI®) indicted that growth within the service sector had slowed throughout May. The figured posted 53.8, down from the previous month’s 54.3.
Employment within the service sector remained broadly unchanged throughout May and input cost pressures remained elevated; output charges increased at solid rate. However UK service providers were at their most optimistic for three months, buoyed by the recent gains in new work and reports of strong business pipelines.
David Noble, CEO for CIPS, said, “Despite more muted growth there are some positives in May’s survey. Most notably, the sector stayed on a growth trajectory despite the hindrance of the additional bank holidays in late April which, as shown earlier this week, also had an impact on manufacturing activity over the same period.
“With confidence at a three-month high driven by a rise in new business, particularly in Business Services and Transport, we might expect to see a stronger expansion next month. However, no one knows the full extent of what government cuts will bring but it’s clear that any business relying on consumers parting with their hard-earned cash is likely to face an uphill struggle.
“It may also be some time before the current level of growth translates into meaningful job creation, as most businesses seem to be coping well at current capacity. So no likelihood of any major recruitment drives just yet.”
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