The UK Markit/CIPS Purchasing Managers’ Index® (PMI®) for the services sector shows strongest rise for five months.
Rising to 53.7 from July's 51.0, activity and incoming new business grow at solid rate and employment shows modest rise.
David Noble, Chief Executive Officer at the Chartered Institute of Purchasing & Supply:
“The service sector’s performance in August is a welcome tonic to toast the end of summer and will undoubtedly provide some cheer for the UK economy, but we can’t afford to get carried away. Growth in August reflects in part a reaction to the temporary factors that impacted the industry in July and the overall economic picture remains incredibly challenging.
“Businesses have seen their profitability deteriorate over the summer due to increased costs. To protect margins, some businesses have pushed up their fees having implemented price freezes or discounting, which are no longer feasible. As a consequence, confidence has improved somewhat, but concerns over the economy at large ensure it remains historically subdued.
“The Olympics resulted in mixed fortunes for the sector with some impacted negatively by travel restrictions and business being placed ‘on hold’. Others have reported higher levels of activity courtesy of new contract wins, marketing initiatives paying off and in some cases better weather.”
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