Service sector growth declines in April
May 05 2011
The headline index was down nearly three points in April
Growth in service sector activity weakened in April, according to the Purchasing Managers’ Index.
The headline index from the Markit/CIPS Business Activity Index was down nearly three points last month to 54.3, from 57.1 in March this year.
A number of respondents attribute the slowdown in the UK’s service sector to the government’s budget cuts.
Chris Williamson, chief economist at financial service information company Markit, which compiled the survey, says its measure of business activity showed the second largest fall since October 2008.
Despite the indication of slowing growth, Markit points to the greatest increase in sales for 13 months as a sign that the service sector remains ‘solid’.
The study shows that input cost inflation dropped to a four-month low, although it remains above the survey average as 38 per cent of respondents indicate a rise in costs since March.
David Noble, CEO of the Chartered Institute of Purchasing and Supply (CIPS), adds that there is some cause for optimism.
‘On the positive side, investment in IT and computing services, traditionally an indicator of expected future growth opportunities, appeared to be spreading – registering the strongest growth in new business and higher demand for new staff,’ he says.
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