UK service sector growth slows, PMI survey shows
- 3 May 2012
- From the section Business
Growth in the UK's dominant service sector slowed in April but remained "solid", according to a closely-watched survey.
The Markit/CIPS services purchasing managers' index (PMI) fell to 53.3 last month from 55.3 in March. A number above 50 indicates growth.
The survey found that profit margins were under pressure from a "strong" rise in input prices.
But it also found business expectations at their highest level for two years.
PMI figures published earlier in the week indicated growth in both the manufacturing and construction sectors had slowed last month.
The manufacturing PMI slipped to 50.5 in April from 51.9 in March, while the construction index fell to 55.8 from March's 21-month high of 56.7.
The services survey found a "solid rise" in volumes of new business, as well as a rise in employment.
The survey is watched particularly closely as services account for more than two-thirds of the UK's total economic output.
"The service sector started the second quarter on a weaker note than in the first quarter, but continued to grow at a reasonable pace," said Chris Williamson, chief economist at Markit.
"Companies continued to report rising levels of new business, which helped drive confidence to the highest for over two years. From what we are hearing from panelists, this certainly does not sound like an economy in recession."
Earlier on Monday, the business group CBI said it expected the UK economy to return to growth in the second half of the year.
Official figures, which are subject to revision, published last week showed that the UK fell back into recession after the economy shrank by 0.2% in the first three months of the year, its second consecutive quarter of contraction.