a5e78a883ee1461dbe78be1b4af1c8c8
DESCRIPTION
guitar bookTRANSCRIPT
Page 1 of 3 Markit 2015 News Release Purchasing Managers Index MARKET SENSITIVE INFORMATION EMBARGOED UNTIL: 09:30 (UK), August 5th 2015 Markit/CIPS UK Services PMI Service sector remains on strong growth pathData collected 13-29 July Key Points: Activity growth eases slightly, but remains marked Employment rises at weakest rate since March 2014New business growth strengthens, but longer-term outlook eases to five-month low Summary: LatestPMIsurveydatafromMarkitandCIPS continuedtosignalstronggrowthinthedominant UK services sector moving into the second half of 2015.Growth of business activity remained sharp, despite easing slightly since June, and was in line withthetrendpaceoverthepasttwo-and-a-half yearsofcontinuousexpansion.Incontrast,new businessroseatafasterrate,andgrowthof outstandingbusinessresumedfollowingJunes decline. The current sequence of job creation was maintained, albeit at a slower rate. Cost pressures remained historically weak, while firms raised their own prices at the strongest rate in five months. Theheadlinefigureforthesurveyisthe seasonallyadjustedMarkit/CIPSUKServices BusinessActivityIndex,asingle-figuremeasure designedtotrackchangesintotalUKservices activitycomparedwithonemonthpreviously. Readingsabove50.0signalgrowthofactivity comparedwiththepreviousmonth,andbelow 50.0contraction.TheBusinessActivityIndexfell to57.4inJuly,from58.5inJune.Thatsignalled growthofactivityforthethirty-firstsuccessive month,andataratethatwasbroadlyinlinewith thestrongaverageoverthissequence. That said, itwasslightlyweakerthanthetrendsshownfor boththefirst(57.6)andsecond(58.2)quartersof 2015.Services expansion remains strong Surveyrespondentslinkedhigheractivitytonew contracts some of which were unexpected new productlaunches,acquisitions,organicbusiness growth and effective marketing campaigns. Incontrasttothetrendshownfortotalactivity, new business expansion acceleratedin July to the highestsinceApril.Thepaceofgrowthwas marked,andbroadlyinlinewiththeaveragefor 2015 so far. Strongerinflowsofnewbusiness,coupledwitha slighteasingingrowthofactivity,ledtoarisein outstanding business at servicesector companies. Thismarkedaresumptionoftherecenttrendof rising backlogs that stretched back to April 2013. UKserviceproviderscontinuedtoexpandtheir workforcesonaverageinJulywith18%offirms reportinggrowth,doubletheproportionthatcut staffduringthemonth.Therateofjobcreation wastheslowestsinceMarch2014,butremained historically strong. Page 2 of 3 Markit 2015 Justunderhalfof firmsexpectedbusinessgrowth overthenext12months,versusonly7%that predicted declines. That said, the overall degree of sentiment eased to a five-month low. InputpricesroseinJuly,linkedtosalaries,IT, regulatorycostsandrents.Thatsaid,therateof inflationeasedtoathree-monthlow,and remainedweakerthanthelong-runsurvey average.Incontrast,priceschargedforservices increasedatthestrongestratesinceFebruary, andonethatwasinlinewiththehistoricsurvey trend. Comment ChrisWilliamson,ChiefEconomistatMarkit, which compiles the survey: A deterioration in service sector growth is the latest in a stream of signals that the economy has slowed aswemoveintothesecondhalfoftheyear.The fallintheservicesPMIfollowssignsofongoing weakness in manufacturing and a renewed slowing in the construction sector.Iffinancialservicesprovidershadnotseenthe fastestgrowthsince2013,thefallinthesurvey would have been even sharper, with slower rates of expansionrecordedinallotherservicessub-sectors.Thehugebusinessservicessector, ranging from architects to accountants, reported the weakest rate of expansion for almost three years. DespitethedipinthePMIinJuly,theservice sectorcontinuestoactasthemaindriverof economicgrowth.ThesurveydatapointtoGDP growthmerelyeasingfrom0.7%inthesecond quarter toa still-impressive 0.6%at the start of the thirdquarter,whichwilldolittletodeterhawksat theBankofEnglandfromvotingforhigherinterest rates.However,themajorityofMPCmemberswillmost likely see no need to rush into hiking rates any time soon.Thedoveswillviewtherecentsignsof coolingeconomicgrowthandslowerjobcreation, also noting that inflation is currently zero and shows fewsignsofliftinghigherduetothestrongpound and falling oil prices. Employment growth slows DavidNoble,GroupChiefExecutiveOfficerat theCharteredInstituteofProcurement& Supply: Thoughdislodgedfromlastmonth,thesectors growthcontinuedtooperateonsolidfoundations and in an optimistic environment. Respondentsreportedafewsurprisesintheform ofunexpectednewbusinesswins,which contributedtoincreasedbacklogs.Overall,activity has continued to rise for 31 months and though the minor easing in growth may raise questions around thecontinuedstrengthofrecovery,recentrevised GDPfiguresfortheUKeconomyconfirmthe sectorssolidityalongwithhalfofthesurveys respondentswhowereoptimisticforthecoming months. Staffinggrowthwasstillrobustcomparedtothe long-termaverage,thoughtheweakestinovera year.Outputchargespersistedintheirupward trend,asfirmswereconfidentofthemarketplaces capacitytoabsorbpricerisesandamidconcerns that rising salaries were reducing margins.
The August Report on Services will be published on Thursday 3rd September 2015 at 09:30 -Ends- Page 3 of 3 Markit 2015 Contact Information: For economics comments, data and technical queries, please call: Joanna Vickers Tel: +44 207 260 2234 Email: [email protected] For industry comments, please call: CIPS Trudy Salandiak Tel: +44 1780 761576 Email: [email protected] to Editors: Where appropriate, please refer to the survey as the Markit/CIPS UK Services PMI. TheMarkit/CIPSUKServicesPMIcoverstransport&communication,financialintermediation,businessservices,personalservices, computing & IT and hotels & restaurants. Each response received is weighted each month according to the size of the company to which the questionnaire refers and the contribution to total service sector output accounted for by the sub-sector to which that company belongs. This therefore ensures that replies from larger companies have a greater impact on the final index numbers than replies from small companies. The results are presented by question asked, showing the percentage of respondents reporting an improvement, deterioration or no change onthepreviousmonth.Fromthesepercentagesanindexisderivedsuchthatalevelof50.0signalsnochangeonthepreviousmonth. Above50.0signalsanincrease(orimprovement),below50.0adecrease(ordeterioration).Thegreaterthedivergencefrom50.0,the greater the rate of change signalled. The indexes are calculated by assigning weights to the percentages: the percentage of respondents reporting an "improvement/increase" aregivenaweightof1.0,thepercentagereporting"nochange"aregivenaweightof0.5andthepercentagereportinga "deterioration/decrease" are given a weight of 0.0. Thus, if 100% of the survey panel report an "increase", the index would read 100. If 100% reported "no change" the index would read 50 (100 x 0.5), and so on. Markitdonotreviseunderlyingsurveydataafterfirstpublication,butseasonaladjustmentfactorsmayberevisedfromtimetotimeas appropriatewhichwillaffecttheseasonallyadjusteddataseries.Historicaldatarelatingtotheunderlying(unadjusted)numbers,first publishedseasonallyadjustedseriesandsubsequentlyreviseddataareavailabletosubscribersfromMarkit.Pleasecontact [email protected]. About Markit Markit is a leading global diversified provider of financial information services. We provide products that enhance transparency, reduce risk andimproveoperationalefficiency.Ourcustomers includebanks, hedgefunds,asset managers, centralbanks,regulators,auditors, fund administratorsandinsurancecompanies.Foundedin2003,weemployover4,000peoplein11countries.Markitsharesarelistedon Nasdaq under the symbol MRKT. For more information, please see www.markit.com.About PMI Purchasing Managers Index (PMI) surveys are now available for over 30 countries and also for key regions including the eurozone. They are the most closely-watched business surveys in the world, favoured by central banks, financial markets and business decision makers for theirabilitytoprovideup-to-date,accurateandoftenuniquemonthlyindicatorsofeconomictrends.Tolearnmoregoto www.markit.com/economics. About CIPS The Chartered Institute of Procurement & Supply (CIPS) is the worlds largest procurement and supply professional organisation.It is the worldwide centre of excellence on procurement and supply management issues.CIPS has a global community of 114,000 in 150 countries, includingseniorbusinesspeople,high-rankingcivilservantsandleadingacademics.Theactivitiesofprocurementandsupplychain professionalshaveamajorimpactontheprofitabilityandefficiencyofalltypesoforganisationandCIPSofferscorporatesolutions packages to improve business profitability. www.cips.org The intellectual property rights to the UK Services PMI provided herein are owned by or licensed to Markit. Any unauthorised use, including but not limited to copying, distributing, transmitting or otherwise of any data appearing is not permitted without Markits prior consent. Markit shall not have any liability, duty or obligation for or relating to the content or information (data) contained herein, any errors, inaccuracies, omissions or delays in the data, or for any actions taken in reliance thereon.In no event shall Markit be liable for any special, incidental, or consequential damages, arising out of the use of the data. Purchasing Managers' Index and PMI are either registered trade marks of Markit Economics Limited or licensed to Markit Economics Limited. CIPS use the above marks under license. Markit is a registered trade mark of Markit Group Limited.