THE UK economy grew by only about 0.35 per cent in the third quarter, a weak rate by historical standards, monthly surveys of manufacturing, services and construction activity signal.
Manufacturing, services, and construction companies have all underlined the dampening impact of Brexit on trading in the latest monthly surveys.
The all-sector output index from the Chartered Institute of Procurement & Supply’s September surveys points to the second-weakest monthly growth rate since April. The index fell from 54.1 in August to 54 last month, although it remained significantly above the level of 50 deemed to separate expansion from contraction.
Chris Williamson, chief business economist at CIPS survey compiler IHS Markit, said: “Our models indicate that the PMI data in the three months to September are consistent with GDP rising by 0.35%.”
The UK grew by only 0.1% in the first quarter, and by a sluggish 0.4% in the three months to June, official data show.
CIPS’s services sector business activity index, published yesterday, fell from 54.3 in August to 53.9 last month on a seasonally adjusted basis. Services companies noted that Brexit concerns among clients and heightened economic uncertainty remained the key constraints on growth.
The UK services sector recorded a slowdown in new order growth last month, although its employment rose at the fastest pace in seven months.
Services companies last month recorded a slight upturn in their overall confidence about the prospects for increased activity on a 12-month time horizon but CIPS noted their optimism “remained subdued” in comparison to the survey average.
Mr Williamson said: “Brexit worries continue to dominate the outlook…keeping business optimism firmly anchored at levels which would normally be indicative of an imminent slowdown. Clarity on Brexit arrangements is...needed as soon as possible to help sustain growth.”
Duncan Brock, group director at CIPS, said: “Though the growth in services activity remained solid, it was below the survey 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.”
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