5 July 2011 | Adam Leach
Confidence levels in the UK services sector
have dropped to their lowest since October, according to the latest purchasing
managers’ index.
The Markit/CIPS Business Activity Index
reported an overall figure of 53.9 in June. This means while there was growth, its
rate has stagnated with the figure remaining broadly unchanged from the 53.8 figure
recorded in May.
The survey found that confidence levels have
dropped to the lowest level since October, with purchasers feeling downbeat about
current economic prospects. It also found that the rate of new employment had come
to a standstill.
Chris Williamson, chief economist at Markit, said: “Private
sector services activity rose at a marginally faster rate than in May, but
growth for the second quarter as a whole looks to have slowed from 0.8 per cent
in Q1 to 0.5 per cent. Gross domestic product therefore could have risen by just
0.3 per cent at best in Q2, down from 0.5 per cent in the first three months of
the year.
“The fractionally faster rate of growth of business activity also
masked some more worrying signs in some of the other survey indicators. Inflows
of new business rose at the slowest pace for four months in June, and optimism
about the coming year hit an eight-month low.
CIPS CEO David Noble said: “A downbeat mood is evident among some in the
sector as confidence regarding future activity softened significantly during
June. Businesses are less than sure-footed due to worries around austerity
measures and general economic conditions.”
