GROWTH in the UK’s service sector held up better than expected in June, yet survey figures released yesterday suggest that GDP expansion will still only reach 0.3 per cent.
Expansion in the UK’s biggest sector services rose slightly to 53.9 last month (from 53.8 in May) according to the latest purchasing managers’ index (PMI) from Markit -- above the expectations of some economics who had anticipated a dip in the index.
However, the rate of new business growth slowed to 54, down from 55.1 in May and 56.3 in April, while backlogs shrank for the third consecutive month.
Employment in the service sector stayed narrowly in positive territory, holding at 50.2 in June – indicating only very slight growth in new jobs.
Prices in the service sector continued to rise in June, albeit at a slower rate than in any previous month this year. This marked the ninth straight month of price hikes.
“The all-sector PMI output index rose from 53.1 in May to 53.6 in June, but the average of 53.8 for the second quarter remained markedly lower than the average of 56.1 seen in the opening quarter,” concluded Markit’s chief economist, Chris Williamson.