-Adds Detail To Version Transmitted At 0850GMT
-UK Sep CIPS Services PMI 52.2 Versus 53.7 In August
-UK Sep CIPS Composite PMI 51.1 Versus 52.2 In August
-CIPS Says PMIs Point To Underlying 0.1% Growth In Q3

LONDON (MNI) – UK services sector growth eased in September after
August’s rebound, according to the latest CIPS/Markit Purchasing
Managers Index for the sector.

The headline September CIPS services PMI slipped to 52.2 from 53.7
in August, remaining in expansionary territory but pushing the
composite, all-sector, PMI down to 51.1 from 52.2 in August.

In what seems bad news for immediate employment prospects in the
sector, Markit/CIPS reported that companies were able to largely keep on
top of workloads with fewer staff. A net fall in employment was recorded
for the first time in ten months.

The September construction and manufacturing PMI headline readings
were both below 50, that is in contractionary territory, but the service
sector dominates the UK economy and its reading was strong enough to
keep the composite PMI just above the 50/50 expansion/contraction point.

Chris Williamson, Chief Economist at survey compilers Markit said
that the September service sector PMI adds to evidence to suggest that
the UK economy barely expanded in the third quarter.

“GDP is likely to have grown by perhaps 0.1% as modest growth of
services activity was offset by a slight drop in construction sector
output and a steeper decline in manufacturing, according to the PMIs,”
he said.

The implied Bank of England GDP forecast for Q3 from the August
Inflation Report is for quarterly growth of around 0.9% and these data
suggest that growth will be somewhat weaker than that.

The CIPS data show are designed as a reflection of underlying
activity but the official Q3 data, out on October 25, will also reflect
the rebound from the -0.4% contraction in Q2, which was partly due to
the one-off effects of record breaking wet weather and the extended
holiday for the Diamond Jubilee.

George Buckley, Chief UK Economist at Deutsche Bank, said in a note
following the PMI data: “So in Q3 expect growth of about 0.6% qoq: a
0.4% bounce back from the Q2 Jubilee, an Olympic effect worth 0.1%, say,
and underlying growth as indicated by the PMIs of 0.1%.”

-London newsroom 0044 207 862 7491; email: wwilkes@marketnews.com

[TOPICS: M$B$$$,MABDS$]