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Saturday 05th of March 2011
March 3, 2011    

UK service sector activity slows in February

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by Kay Murchie

Growth in the UK’s closely-watched service sector slowed in February, figures have revealed today.

The Chartered Institute of Purchasing and Supply (CIPS)/Markit purchasing managers’ index (PMI) fell to 52.6 in February from January’s eight month high of 54.5.

Analysts had expected the index to hit a level of 54.0 in February.

December saw a negative reading, which was attributed to the bad weather and the index fell to a 20-month low of 49.7.

However, today’s reading means the index remains above the crucial 50 level, which separates growth from contraction.

Commenting on the index, Paul Smith, senior economist at Markit, said: “February saw growth of the UK service sector return to the modest rate seen prior to the weather-related readings of December and January, leaving it on course to expand by around 0.3 percent in Q1”.

The survey covers businesses making up around 40% of the economy, but does not include retailers or the public sector.

The figures come shortly after the CIPS/Markit PMI index revealed UK construction activity surged to an eight-month high in February.

The construction PMI rose to 56.5 in February, up from January’s 53.7 – confounding analysts expectations of a drop to 52.9.

Meanwhile, UK manufacturing activity held its record high in February. The closely-watched CIPS/Markit manufacturing PMI remained at 61.5 in February – which represents the highest reading since records began in 1992 and exceeded forecasts of 61.

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