Tuesday, July 05, 2011
Decent service sector growth
Posted by David Smith at 10:00 AM
Category: Thoughts and responses

After recent weak surveys, news that the service sector continued to grow at a decent pace in June will have comes as a relief, though Markit, which prepares the numbers, expects only 0.3% growth in gross domestic product in the second quarter.

More details from Markit:

- Activity continued to increase, but rate of expansion remained below trend.
- Incoming new business rose at solid, but slower, pace in June.
- Job creation remained minimal; business confidence down to eight-month low.

"UK service sector growth was sustained during June at a solid pace as volumes of incoming new business continued to rise. However, rates of expansion remained below trend, a factor that led to another month of broad employment stagnation. Moreover, confidence amongst service providers weakened markedly to the lowest since last October as panellists provided a generally downbeat assessment of current economic conditions."

"The headline index from the survey, the Markit/CIPS Business Activity Index, registered 53.9 in June, a broadly sideways movement on May’s 53.8. The index has registered above the crucial 50.0 no-change mark for six months in a row, and the latest reading was consistent with solid expansion of the UK service sector."