Wednesday, August 04, 2010
Services trail manufacturing as house prices surprise
Posted by David Smith at 11:30 AM
Category: Thoughts and responses

Rebalancing the economy probably means that manufacturing should outstrip services, particularly as industry suffered a larger output fall during the recession. Even so, such is its weight in GDP that a healthy performance from private services is needed for growth reasons. That is still happening, but at a slower pace than before, The service sector purchasing managers' index slipped to 53.1, from 54.4 in June, still consistent with growth but at its slowest pace since June last year.

One area of private sector services is buying and selling houses. Ahead of the latest Halifax house price index, you would have got pretty narrow odds on a monthly fall. In fact they rose by 0.6% in July, and were 4.9% up on a year earlier. Despite this, prices are plainly flattening out.