5th Nov 2024 10:08
(Alliance News) - The pace of growth in UK's service sector softened in October as businesses had waited for the government budget announced at the end of the month, data published by S&P Global showed Tuesday.
The S&P Global UK services purchasing managers' index declined to 52.0 points in October from 52.4 in September. Falling towards the neutral 50-point mark separating growth from contraction, it indicates the pace of growth slowed. However, the October reading beat the flash score of 51.8 points.
"The wait for clarity on government policy ahead of the autumn budget was widely reported to have weighed on business confidence and spending. Broader geopolitical concerns and forthcoming US elections also added to a sense of wait-and-see on business investment decisions in October. At the same time, cost of living pressures remained a constraint on household spending," said Tim Moore, economics director at S&P Global Market Intelligence.
"With service providers grappling with softer new order growth and less upbeat business activity expectations for the year ahead, the latest survey pointed to a decline in staffing numbers for the first time since December 2023. A number of firms also noted budget constraints due to elevated salary pressures."
Meanwhile, the S&P Global UK PMI composite output index stood at 51.8 in October, down from 52.6 in September, and the lowest reading since November 2023. October's figure nevertheless was better than the flash reading of 51.7.
The slowdown was due to weaker private sector growth dampening expansion in the manufacturing and service sectors, S&P Global said.
Further, S&P Global noted that input price inflation eased in October which reflected "much softer" cost pressures in the manufacturing sector.
The data comes after S&P Global on Friday announced that the manufacturing purchasing managers' index dropped to 49.9 points in October from 51.5 in September, entering contraction territory and falling short of the flash tally of 50.3.
It was the first time the manufacturing PMI has landed below 50 points since April.
The services PMI is compiled by S&P Global from responses to questionnaires sent to a panel of around 650 service sector companies. The responses were collected between October 10 and 29.
By Tom Budszus, Alliance News slot editor
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