UK Services Activity Expansion Edges Higher in July: Survey

--July IHS Markit/CIPS Services PMI 53.8 vs 53.4 June

By Jamie Satchithanantham

     LONDON (MNI) - UK service sector activity picked up modestly in July,

rebounding from June's four-month low, a survey published Thursday showed.

     The June Services PMI survey by IHS Markit, conducted for the Chartered

Institute for Procurement and Supply, rose 0.4 points to 53. from 53.4 in June,

a touch above the MNI median of 53.5. It was the eleventh straight month the PMI

registered above 50.0.

     The modest acceleration in service sector activity, which comprises almost

80% of UK output, is in line with the sister PMIs, the manufacturing and

construction surveys, both of which were little changed.

     July's pick up was was put down to activity work across the sector. Service

providers nonetheless continued to boost their employment numbers, with the pace

of job creation edging up to its strongest for a year-and-a-half.

     Staff recruitment continued to gain traction, reaching its strongest pace

since the start of 2016. Increased payroll numbers were attributed to long-term

expansion plans and rising business requirements. A number of companies also

noted difficulties filling current vacancies with suitably skilled staff.

     "The service sector PMI indicates that businesses remain in expansion-mode

despite heightened uncertainty about the outlook, but also highlights how the

risks to future growth remain firmly biased to the downside," Chris Williamson,

Senior Economist at IHS Markit, said.

     "Taken together, the three PMI surveys are broadly consistent with economic

growth of just over 0.3%, putting the country on course for another steady but

sluggish expansion in the third quarter," he added.

     "However, 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," Williamson noted.

     The full IHS Markit release can be seen here: goo.gl/RkSuqZ

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com