Services sector growth still slow as weak consumer demand takes its toll

DESPITE a slight increase, growth in overall business activity in the services sector slowed for the second consecutive month in August; with new business, employment, profitability and optimism amongst companies all taking a hit due to ongoing weak consumer demand.

The only thing that kept activity moving upwards was an increase in export orders. The latest edition of the monthly services purchasing managers’ index (PMI), from NCB Stockbrokers, shows that total new business, amongst services companies, declined for the fourth month in a row with August showing the sharpest fall for some time.

The subsequent fall in workloads led to a further fall in employment levels. While August saw only a modest reduction in job numbers, staff cuts have been a regular trend in the sector for all but one of the past 42 months.