–UK Apr CIPS Services PMI 54.3 Vs 57.1 In Mar – Markit/Reuters
LONDON (MNI) – The rate of UK service sector growth decelerated
markedly in April, while output prices rising to their highest level
since September 2008, according to the Purchasing Managers Index from
Markit.
Markit said the message from their trilogy of April PMI surveys was
the UK economy saw a sharp loss of momentum at the start of the second
quarter. The April services PMI fell to 54.3 from 57.1 in March, while
the output price index rose to 53.8 from 52.2.
“The service sector suffered a sharp loss of growth momentum at the
start of the second quarter. The survey’s measure of business activity
showed the second-largest fall since October 2008, exceeded only by the
sector’s weather-related slide back into contraction in December,” Chris
Williamson, chief economist at Markit said.
The survey showed the service sector returned to cutting jobs and
Markit said its data suggested the economy was only growing 0.4% on the
quarter – below estimates of trend growth.
The read across from the CIPS surveys, which do not cover some key
areas of the economy, most notably retail, and GDP is not
straightforward however, and recent GDP outturns have not correlated
closely with the CIPS data.
Williamson said the deceleration in services growth reflected the
fiscal squeeze.
“The deterioration in the sector’s performance can be largely
linked to government spending cuts. Many companies reported that
business had been boosted by government departments using up their
budgets prior to the new financial year to a greater extent than usual
in the first quarter, perhaps due to the impending closures of
government departments and projects,” he said.
–London newsroom 0044 207 862 7491; email: drobinson@marketnews.com
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