Economy

Recession likely as United Kingdom services sector slows

Recession likely as United Kingdom services sector slows”

"Both manufacturers and service providers believe that supportive public policies can help shift growth momentum into a higher gear in the coming 12 months", she said in a statement.

Business conditions in the Indian service sector remained conducive to economic growth in August with PMI data highlighting sustained increases in activity, sales and employment, according to IHS Markit India Services Purchasing Managers' Index (PMI) released on Wednesday.

The IHS Markit India Composite PMI Output Index, that maps both the manufacturing and services industry, fell from 53.9 in July to 52.6 in August.

On Monday, it was reported that the UK's manufacturing output had slumped to a seven-year low as demand took a hammering due to widespread uncertainty.

The headline figure came below market expectations of 51.0, and well below the 51.4 seen in the previous month.

"The worry was that the weakness in the manufacturing sector would eventually infect the rest of the economy, and the service sector is certainly showing symptoms of the malaise having spread", said Phil Smith, Principal Economist at IHS Markit.

The sector shrank at the fastest rate since 2012 in August, the fourth consecutive month of contraction, with a PMI reading of 47.4 for July.

Optimism fell for the third month in a row, with IHS Markit saying that the degree of confidence in sectoral growth was "now the lowest for just over three years".

"Survey respondents widely commented on concerns that domestic political and economic uncertainty would have a negative impact on business investment and client demand", it said.

Service-based firms, which include hotels, restaurants, banks and insurers, are also seeing profit margins squeezed by rising staff wages, fuel costs and utility bills, the survey found.

News of slower growth in services sector follows data earlier this month showing eight infrastructure industries that account for two-fifths of the index of industrial production (IIP) slowed to a 2.1% expansion in July, down from a 7.3% growth in the year-ago period.

"The August PMI indicates that US manufacturers are enduring a torrid summer, with the main survey gauge down to its lowest since the depths of the financial crisis in 2009", Chris Williamson, chief business economist at IHS Markit said in the report.



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