Growth hopes dampened despite UK services sector continuing recovery
The UK’S powerhouse services sector delivered a second consecutive month of growth in May, though it seems unlikely to provide much of a lift to the wider economy in the second quarter.
The closely monitored IHS Markit/cips services purchasing managers’ index( PM I) showed a reading of 51 for May, up from 50.4 in April. Any figure above 50 denotes growth.
It marks continued growth for the sector after bouncing back from contraction territory in March. The PMI services snapshot does not encompass Britain’s vast retail sector, which has been flagging of late.
Staffing levels rebounded in May, with the latest information showing a “modest rate” of job creation, which was the strongest since November 2018.
However, a number of service providers warned that B rex it-related uncertainty had“contributed to subdued business and consumer spending”.
Chris Williamson, chief business economist at IHS Mark it, said :“Although service sector business activity gained a little momentum in May, with growth reaching a three-month high, the pace of expansion remained disap - pointingly muted and failed to offset a marked deterioration in manufacturing performance and a fall in output of the construction industry during the month.
“As a result, the PMI surveys collectively indicated that the UK economy remained close to stagnation midway through the second quarter as a result, registering one of the weakest performances since 2012.”
Howard Archer at theEY Item Club noted :“Overall, the May purchasing managers’ surveys point to a stuttering UK economy in the second quarter following the UK’S delayed exit from the EU.”