Ernst & Young ITEM Club comments on today's PMI services figures
Nida Ali, economic advisor to the Ernst & Young ITEM Club, comments on today’s PMI services figures
A pick-up in the services PMI comes as a sliver of relief
But underlying weakness in the sector continues
Given increased uncertainty in the economic outlook, the struggle for service providers is likely to continue for some time yet
"September’s pick-up in the services PMI comes as a sliver of relief, especially after last month’s downbeat results. It is a welcome sign that activity has resumed so quickly after the recent turmoil in financial markets. Moreover, the rise in new orders is encouraging, and implies some momentum in the sector in the coming months.
"Having said that, underlying weakness in the sector continues. With employment in September remaining flat, it is clearly not strong enough to generate more jobs, and this trend is expected to continue in the months ahead. Moreover, business confidence has fallen further which suggests a dampening of the sector’s growth prospects in the near future.
"With increased uncertainty in the economic outlook, due to adverse developments both at home and abroad, the wider economy remains unsupportive, and the struggle for service providers is likely to continue for some time yet."
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