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The decline in the UK private sector persisted at the start of the fourth quarter, though at a lesser pace, numbers on Friday showed.
The decline in the services sector also eased. The S&P Global/Chartered Institute of Procurement & Supply services purchasing managers’ index rose to 49.5 points in October, from September’s 49.3 and above the flash tally of 49.2.
Moving closer to the 50.0 point no change mark, the latest figure suggests the decline in the services economy abated. It was the third successive month in contraction territory, however.
‘The marginal decline in business activity during October was often attributed to a lack of new business opportunities amid unfavourable domestic economic conditions and squeezed household budgets. Although only modest, the latest reduction in total new work was the fastest recorded since November 2022,’ S&P Global said.
‘Pockets of growth in international markets helped to lift new export orders in October. Higher levels of new work from abroad have been recorded in ten of the past eleven months, with the latest upturn typically linked to rising demand from clients in the US and Middle East.’
The wider composite PMI, which is a weighted average of the services and manufacturing readings, registered 48.7 points in October, recovering from September’s eight-month low of 48.5. It was sligthly ahead of the flash reading of 48.6 points.
‘Manufacturing production once again decreased more quickly than service sector activity. A similar pattern was seen for new orders, with goods producers recording a much steeper drop in sales volumes than service providers. Private sector employment fell for the second month running in October. Although only modest, the rate of job shedding was the second-fastest since January 2021,’ S&P Global said.
‘Business expenses at private sector companies increased at the slowest pace for 33 months in October. Rising wages more than offset falling raw material prices, according to survey respondents. There were divergent trends for prices charged, with manufacturers cutting their output charges, while service providers signalled another robust rise.’
The manufacturing PMI posted 44.8 points in October, edging up from 44.3 in September, according to numbers on Wednesday.
The S&P Global services PMI is compiled using responses from around 650 service sector firms.
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