Details from the February 2017 UK Markit/CIPS services PMI data report 3 March 2017
Prior 54.5
Input prices 66.4 vs 65.0 Prior. Highest for over
68 1/2 yearsNew orders 54.7 vs 55.9 prior
Composite 53.8 vs 55.4 prior
New orders 54.9 vs 56.2 prior
Not a good number on the face of it.
New orders is where most of the weakness lies but optimism is still running at high levels seen before the referendum. Obviously that optimism needs to show up in orders down the line, and sooner rather than later.
Employment remained well up but not as strong as previously. Firms said that hiring was aimed at covering long-term expansion plans, new product development and bigger workloads.
Not so good was some firms reporting that they are seeing a squeeze in consumer finances, and higher operating costs that were putting a dampner on growth.
"A further slowdown in UK business activity growth
in February adds to evidence that the economy has
lost momentum after the impressive expansion
seen at the end of last year. The PMI surveys are
collectively signalling GDP growth of 0.4% in the
first quarter.
"Weaker consumer spending was a key cause of
slower service sector growth, suggesting that
household budgets are starting to crack under the
strain of higher prices and weak wage growth.
"The ongoing steep upturn in costs suggests that
consumer price inflation has significantly further to
rise, adding to our belief that inflation will breach
3% over the course of the next year.
"However, the slowdown in the pace of economic
growth signalled by the February data pushes the
PMI surveys back towards territory more indicative
of additional policy stimulus from the Bank of
England than a tightening. Policymakers are
therefore likely to continue to stress the need to
look through any further upturn in inflation and
focus instead on the need to keep policy
accommodative in the face of a likely further
slowing in the pace of economic growth in 2017."
Said Markit's Chris Williamson
Naturally the pound has taken a dunking through all the support around 1.2250/60, and if that starts showing up as resistance, we'll be heading even lower.
