The British service sector expanded at the slowest pace in nineteen months in July, as the weakening economic climate weighed on activity, data from a survey by Markit Economics and the Chartered Institute of Purchasing and Supply (CIPS) showed Friday.
The seasonally adjusted purchasing managers' index (PMI) for the service sector dropped to 51 in July from 51.3 in June. Economists were looking for a reading of 51.6. A PMI reading above 50 shows expansion in the sector, while one below indicates decline.
New orders received by UK service providers rose at a faster rate during the month. Service providers increased their workforces further in July, extending the current run of growth to eight months.
Input prices continued to rise as suppliers were passing on their own higher costs. Competitive pressures and soft underlying demand encouraged discounting amongst service providers in July, leading to a substantial fall in output charges.
"Slower growth of activity is somewhat disappointing following the disruption of the Queen's Jubilee in June", Paul Smith, Senior Economist at survey compilers Markit, said. "Although anecdotal evidence suggests that a number of temporary factors remain in play - poor weather in the first half of the month and pre-Olympics disruption were reported in some quarters - companies continued to indicate that underlying demand remains fragile."
by RTT Staff Writer
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