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UK Markit / CIPS PMI Figures Show Minor Slowdown

Wednesday, July 05, 2017

UK service providers indicated another slowdown in business activity growth during June, which largely reflected the weakest upturn in new work since September 2016. Survey respondents commented on subdued business and consumer confidence, alongside some instances of delayed decision making around the election. “A slowing in services sector growth completes a triple-whammy of disappointing PMI survey readings. Although the three PMI surveys are running at levels that are historically consistent with GDP growing by around 0.4% in the second quarter, it’s clear that the economy heads into the third quarter losing momentum. With business optimism having been hit by the intensification of political uncertainty following the general election and commencement of Brexit negotiations, at the same time that households are battling against rising inflation, the indications are that the economy’s resilience is being tested” said Chris Williamson, Chief Business Economist at IHS Markit.

Justin Zatouroff, head of business services at KPMG UK comments “fierce competition for new work is putting pressure on pricing, which is leading to an ongoing squeeze on margins. The combination of input cost inflation, Brexit and pricing pressures suggests that businesses in the services sector need to keep an eye on the horizon”.

Related news: Sourcing Market Could Win in Brexit

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