IHS Markit warns of ‘sluggish expansion’ ahead for the services sector | City & Business | Finance


A closely watched purchasing managers’ snapshot of activity across hotels and restaurants, IT and transport, which makes up over three-quarters of GDP, showed a slight improvement from June. 

Job creation was at its strongest for 18 months, but expectations for the year ahead were “relatively weak”, according to the IHS Markit/CIPS survey. 

IHS Markit’s Chris Williamson said the combined data from services, manufacturing and construction, point to a “steady but sluggish expansion” in the third quarter.

He said: “Taken together, the three PMI surveys are broadly consistent with economic growth of just over 0.3 per cent, putting the country on course for another steady but sluggish expansion in the third quarter.”

But he warned that “while the current picture remained one of an economy showing overall resilience in the face of concerns about the outlook, the subdued level of business optimism suggests it’s likely that growth will at least remain modest and could easily weaken in coming months”.

He added: “Firms’ prospects for the coming year have slipped to a level which has previously been indicative of the economy stalling or even contracting, having taken a lurch downward since the General Election, largely reflecting heightened uncertainty about the economic outlook and Brexit process.”

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