UK service sector growth sees slight rise in June

| July 5, 2011 | 0 Comments
”UK

Growth in the UK’s closely-watched service sector rose slightly last month, figures have revealed today.

The Chartered Institute of Purchasing and Supply (CIPS)/Markit purchasing managers’ index (PMI) edged higher to 53.9 in June from May’s three-month low of 53.8.

The result confounded analysts’ expectations of a fall to 53.5.

The index continues to remain above the crucial 50 level, which separates growth from contraction. However, the rate of growth remains below trend.

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: “Worries over the impact of government austerity measures continue, and a number of panellists were pessimistic about economic conditions in general.”

The figures come shortly after the closely-watched CIPS/Markit manufacturing PMI fell to a 21-month low last month to 51.3 from May’s reading of 52.

The reading was slightly lower than the 52.1 expected by analysts.

The manufacturing sector, which accounts for around 13% of economic output, has been one of the bright spots in the UK economy, but the latest surveys will no doubt raise fears about the recovery.

In the meantime, earlier this week, the CIPS/Markit PMI index revealed growth in the UK’s construction industry slowed in June.

The PMI dipped to 53.6 in June from May’s reading of 54 – however, this figure was broadly in line with expectations.

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

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