Muted rebound for services after storms
Activity in Britain’s dominant services sector saw only a subdued rebound last month after the severe weather had seen it weaken to the slowest rate for 20 months in March.
The Mark it/Cips services purchasing managers’ index ( PMI) showed a reading of 52.8 in April, up from 51.7 in March – where any reading above 50 indicates growth.
Howard Archer, chief eco - nomic advisor to the EY Item Club, branded the latest performance as“pretty di sap- pointing”, with the figure coming in below the City consensus forecast of 53.5.
There was also a marginal fall in work backlogs among service sector firms, which include transport, hotels and restaurants, financial services and IT.
Archer said: “New business growth was subdued in April, dampening hopes for a significant pick- up in services activity in the near- term at least.
“Subdued consumer spending held back services activity in April, indicating consumers remain cautious as the extended squeeze on their spending power only gradually eases.” Chris Williamson, chief business economist at IHS Markit which compiles the survey, said :“The services survey adds to signs that the rate of economic growth remained disappointingly subdued at the start of the second quarter.
“The three PM I surveys collectively showed only a muted rebound in business activity after being disrupted by heavy snowfall in March, failing to regain February’ space of growth to suggest that the underlying performance of the economy has continued to deteriorate.”