–UK May CIPS Services 55.4 Versus 55.3 April
–CIPS Says Survey Detail Raises Concerns Over Possible Double-Dip
LONDON (MNI) – UK’s service sector growth came in weaker than
expected in May, showing little change from April, according to the
Markit/Chartered Institute of Purchasing and Supply’s latest survey.
The headline UK May services activity index came in at 55.4, below
analysts’ expectations for a 55.7 outturn. The data follow an
exceptionally strong CIPS manufacturing survey, which came in at 58.0,
matching April’s 15-year high.
In a reversal of the UK’s long-running trend, the current picture
is one of manufacturing, bolstered by export growth, expanding more
rapidly than services.
Service sector growth in May was hit by the weakest rise in new
business for nine months, CIPS said.
While input costs rose markedly service sector output inflation
remained subdued and the survey showed that overall employment in the
sector fell in May.
Paul Smith, Senior Economist at Markit, said “On the surface, the
headline index suggests that the dominant service sector expanded at a
solid clip in May and remains on course to make a reasonable
contribution to second quarter GDP.”
He added, however, that “weaker trends in new business and
employment raising questions over the sector’s ability to maintain its
current level of growth in the second-half of the year.”
David Noble, CIPS CEO, went further, saying the survey detail
“reveals some worrying signs and raises concerns about the prospect of a
double-dip recession.”
— London bureau: 004420 7862 7491 e-mail: drobinson@marketnews.com —
[TOPICS: M$B$$$,MABDS$,MT$$$$]
