CIPS survey shows ‘deceleration’ in service industry

Source: Supply Chain Digital

Date :06/11/2007 10:30:07

The latest CIPS/NTC Report on Services has indicated a marked deceleration of the UK service sector in October

According to the report, business activity and new work are increasing at their slowest rates for nearly four-and-a-half years.

Market conditions were reported to be generally tougher and, with increased uncertainty signalled amongst panellists, business expectations in the sector weakened to their lowest in over a year.

Roy Ayliffe (pictured), Director of Professional Practice at CIPS, said on the results:

“Following a period of sustained growth, the UK services sector is feeling the effects of the recent economic turbulence.

"Purchasing managers reported that market conditions are generally tougher than in previous months and that they are continuing to face sharp inflation of input costs. As a result, many firms in the service sector have increased their output charges in a bid to protect margins from further rises in operating costs.

“On a more positive note, employment remains solid as companies have continued to recruit in anticipation of future new business wins, although there are concerns over the impact of the recent financial market crisis and panellists expressed further concerns over the health of the UK housing market.

"These concerns dented confidence in the sector although more than half of the respondents expect growth in the coming year.”