September’s data shows another solid increase in business activity across the UK service sector, with the rate of growth easing only slightly since August.
The IHS Markit/CIPS UK services PMI fell to 53.9 in September from the 54.3 reading in August, falling short of the 54 reading that economists had predicted.
Higher levels of business activity were attributed to a solid increase in new work and competitive pricing strategies during September. The main constraints on growth however remain Brexit concerns and heightened economic uncertainty.
Higher fuel prices also led to another sharp rise in input costs, but relatively subdued demand conditions meant that output charges rose at the slowest pace since June 2017.
Chris Williamson, Chief Business Economist at IHS Markit, which compiles the survey says: “Brexit worries continue to dominate the outlook, however, keeping business optimism firmly anchored at levels which would normally be indicative of an imminent slowdown. Clarity on Brexit arrangements is therefore needed as soon as possible to help sustain growth.”
Duncan Brock, Group Director at the Chartered Institute of Procurement & Supply, adds: “Though the growth in services activity remained solid this month it was below the survey’s average, and there are still some potential challenges that could just tip the sector’s scales into more concerning territory.
“Gloom over Brexit continued to bear down on confidence which translated into client hesitancy over placing big ticket contracts. Longer delays in decision-making also contributed to the underwhelming pace of new order growth as a subdued UK economy failed to fill the void.”
In this rapidly changing economic landscape, it is essential that all business owners and managers be aware of income and expenditure by keeping proper records and monitoring trends and patterns. Profit and loss accounts will help you understand how your business is progressing, as well as alert you to any potential issues which might arise, giving you ample warning to rectify the problems or make the necessary adjustments to keep your business on track and successful.
At Beavis Morgan, our specialists to SMES are available to provide general business advice and to structure your business for tax. We can also assist with long and short-term forecasts, budgets, business plans, sensitivity analysis, and calculating and checking compliance with covenants.