UK services growth picks up slightly in March, but remains subdued
- March rounds off weakest quarter of output growth in services since Q1 2013
- Slowest rise in new business since January 2013
- Charges levied by service providers rise at fastest rate in over two years
UK service sector growth remained sluggish in March, according to the latest PMI® survey data from Markit and CIPS. Total activity increased at a slightly faster rate than in February, but on a quarterly basis growth over the first three months of 2016 was the weakest since Q1 2013. Moreover, incoming new business increased at the slowest rate since January 2013.
Global economic uncertainty and the upcoming EU membership referendum were commonly reported to be factors undermining service sector business expectations during the month. Employment in the sector continued to rise, but at a rate little-changed from February’s recent low. The latest survey data did signal a rise in inflationary pressures, particularly for charges which increased at the fastest rate in over two years. The headline figure for the survey is the seasonally adjusted Markit/CIPS UK Services Business Activity Index, a single-figure measure designed to track changes in total UK services activity compared with one month previously. Readings above 50.0 signal growth of activity compared with the previous month, and below 50.0 contraction.
The Business Activity Index rose to 53.7 in March, from February’s 35-month low of 52.7. This signalled a faster rate of growth in output, but the second-weakest in six months. Moreover, the Index remained below its long-run average of 55.2, and the average for the first quarter of 2016 (54.0) was the lowest of any quarter since Q1 2013.
Latest data suggested that growth will remain subdued moving into the second quarter of the year. The volume of incoming new business increased in March but at the weakest rate since January 2013, the first month of the current growth sequence. Growth of outstanding business at UK service providers was maintained in March, following January’s contraction. That said, the rate of growth remained modest. Service providers continued to expand workforces in March. The rate of job creation was solid overall, but remained weaker than the trend shown over the current 39-month sequence of growth.
See the full article on the CIPS website....
Global economic uncertainty and the upcoming EU membership referendum were commonly reported to be factors undermining service sector business expectations during the month. Employment in the sector continued to rise, but at a rate little-changed from February’s recent low. The latest survey data did signal a rise in inflationary pressures, particularly for charges which increased at the fastest rate in over two years. The headline figure for the survey is the seasonally adjusted Markit/CIPS UK Services Business Activity Index, a single-figure measure designed to track changes in total UK services activity compared with one month previously. Readings above 50.0 signal growth of activity compared with the previous month, and below 50.0 contraction.
The Business Activity Index rose to 53.7 in March, from February’s 35-month low of 52.7. This signalled a faster rate of growth in output, but the second-weakest in six months. Moreover, the Index remained below its long-run average of 55.2, and the average for the first quarter of 2016 (54.0) was the lowest of any quarter since Q1 2013.
Latest data suggested that growth will remain subdued moving into the second quarter of the year. The volume of incoming new business increased in March but at the weakest rate since January 2013, the first month of the current growth sequence. Growth of outstanding business at UK service providers was maintained in March, following January’s contraction. That said, the rate of growth remained modest. Service providers continued to expand workforces in March. The rate of job creation was solid overall, but remained weaker than the trend shown over the current 39-month sequence of growth.
See the full article on the CIPS website....