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TOP NEWS: UK Service Sector Activity Shows "Resilience" In September

Mon, 5th Oct 2020 09:47

(Alliance News) - The UK's key service sector continued to expand in September, figures showed on Monday, albeit at a slower pace than the month before.

The IHS Markit/CIPS UK services purchasing managers' index fell to 56.1 in September from August's 58.8. August's reading was the strongest since 2015.

While September's reading was the lowest since June, the index still pointed to a "marked" rate of growth, said IHS Markit. Further, it beat the flash reading of 55.1.

Supporting activity was an increase in levels of incoming new work, while market demand continued to improve.

Less positively, the latest data indicated that employee numbers in the UK service sector continued to fall. Though easing to the slowest since March, the level of job losses was "again marked".

Confidence over the year ahead remained "comfortably inside" positive territory, though did ease to a four-month low.

Chris Williamson, chief business economist at IHS Markit, said: "The UK service sector showed encouraging resilience in September, with business activity continuing to grow solidly despite the government’s Eat Out to Help Out scheme being withdrawn."

He noted, though, that the outlook has "cooled somewhat".

"Companies grew increasingly worried about the impact of a second wave of virus infections and the gradual withdrawal of government support, especially the furlough scheme. Brexit worries are also rising again, causing hesitancy in spending and investment decisions. While the third quarter will inevitably see a strong economic rebound, growth in the fourth quarter looks likely to be far less impressive," said Williamson.

By Lucy Heming; lucyheming@alliancenews.com

Copyright 2020 Alliance News Limited. All Rights Reserved.

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