Services growth slows as concerns over Brexit impact mount

Services sector growth slowed last month, as uncertainty over the impact of Brexit impeded orders and knocked confidence.

Service firms interviewed for the Markit/CIPS purchasing managers’ index (PMI) survey said there had been subdued business-to-business sales and delayed decision making on large projects in response to Brexit related uncertainty.

Reflecting this, September’s data indicated that overall new business volumes expanded at the slowest pace since August 2016.

The net balance of survey respondents anticipating a rise in business activity over the next 12 months was the lowest since June, meaning that business confidence remained close to its weakest since the end of 2011.

Duncan Brock, Director of Customer Relationships at the Chartered Institute of Procurement & Supply, said: “Strong signals indicate a stagnation trend is developing in the sector.

“With a subdued rate of expansion in September, UK services maintained a lower than long-term average performance this month.

“Where consumers recovered a little from their spending hesitation last month, it was the turn of businesses to be spooked into inactivity, exerting greater scrutiny over new projects and long-term spending plans.

“The pressure of Brexit and resulting uncertainty were at the heart of this indecision.”