UK service sector activity sinks to 3-month low in May

| June 3, 2011 | 0 Comments

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

The Chartered Institute of Purchasing and Supply (CIPS)/Markit purchasing managers’ index (PMI) eased to a 3-month low of 53.8 in May from 54.3 the previous month.

Analysts had expected the index to be around the 54.0 level.

However, the index remains above the crucial 50 level, which separates growth from contraction.

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

Chris Williamson, Markit’s Chief Economist, comments: “The three Markit/CIPS UK PMI surveys collectively signalled a slowing in the rate of economic growth for the second month running in May, taking the rate of expansion down to the weakest since heavy snowfall caused a near-stagnation of growth in December.”

The closely-watched CIPS/Markit manufacturing PMI dropped to 52.1 in May, from a reading of 54.4 in April.

The reading was lower than the 54.1 expected by analysts and the lowest reading since September 2009.

The manufacturing sector accounts for around 13% of economic output.

In the meantime, earlier this week, the CIPS/Markit PMI index revealed UK construction activity beat expectations last month.

The PMI rose to 54.0 in May, from April’s reading of 53.3 – beating expectations of a reading of 53.6.

Construction accounts for around 6% of Britain’s economic output.

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