- Photo by Jack Taylor/Getty Images
LONDON – Britain’s services sector, which accounts for more than 75% of the country’s GDP, slowed down in the month of August, falling to an 11-month low, according to the latest PMI survey from IHS Markit.
The services sector – which includes everything from banking to waiting tables – drew a reading of 53.2 in the month, down from the previous 53.8 score in July, and lower than the forecast of 53.5 provided before the release.
“UK service providers recorded solid rises in business activity and incoming new work during August, but rates of growth eased since July and remained notably weaker than seen on average in the first half of 2017,” IHS Markit said in a statement.
“Survey respondents noted that subdued client demand and heightened uncertainty about the domestic economic outlook had weighed on business activity growth in August.”
The purchasing managers index (PMI) figures from IHS Markit are given as a number between 0 and 100.
Anything above 50 signals growth, while anything below means a contraction in activity – so the higher the number is, the better things look for the UK.
Here’s the chart:
- IHS Markit
“A slowdown month as the services sector comes off the boil, challenged by a general unwillingness to spend and invest, alongside fragility in confidence amongst consumers as a result of Brexit,” Duncan Brock, the director of customer relationships at the Chartered Institute of Procurement & Supply, which helps compile IHS Markit’s survey, said.
The disappointment from the services sector follows just 24 hours after the same survey of the UK’s construction sector showed that it is edging towards a second recession in a year.
“August survey data indicated that the UK construction sector continued to experience a slowdown this summer,” IHS Markit said.
“Reduced levels of commercial work were a key source of weakness, which offset robust growth in residential building.”
Last week, IHS Markit’s survey of the manufacturing sector showed that it saw growth surge in August as new orders from both the USA and Europe flooded into the country and supported the sector.