–Dec Services PMI 54.0 Vs 51.5 Median, 52.1 In Nov
–Business Expectations Continue To Languish At Sep’s 2 1/2 Year Low
–All-Sector PMI Rises To 53.2 Vs 51.2 In Nov
–But Data Still Point To Economic Stagnation In Q4

LONDON (MNI) – The latest Markit/CIPS purchasing managers’ services
sector survey showed a positive end to the year for the UK service
sector.

The latest Chartered Institute of Purchasing and Supply/Markit
Purchasing Managers’ Survey showed a 54.0 reading for headline activity
in December, a 5-month high and up from the 52.1 reading seen in
November.

This was well above the 51.5 MNI median forecast

But Markit reported respondents describing the economic climate as
tough, reflected by continued margin pressure (costs again rose steeply
while output charges were little moved), while business confidence
matched the two-and-a-half year low seen in September.

Chris Williamson, Chief Economist at survey compilers Markit, said
that the numbers would help the UK avoid a slide back toward recession
in the latest quarter but he warned that the outlook remained grim:

“The December survey rounds off a reasonable fourth quarter for the
service sector, which is likely to again provide the main stimulus to
overall economic growth. Services are likely to have expanded by around
0.3%-0.4% in the final quarter, down from 0.7% in the third quarter but
offsetting a renewed downturn in manufacturing and sluggish growth of
construction to help the UK avoid a slide back into recession, at least
for now.

“Looking ahead, however, companies grew increasingly worried about
the coming year, suggesting that the upturn may prove short-lived as we
move into 2012. Expectations of business growth slipped to the
joint-weakest since March 2009, with firms anxious about the impact of
the Eurozone crisis and domestic austerity measures”.

The weighted average of the output indices from the three
Markit/CIPS PMI surveys rose from 51.2 in November to 53.2 in December –
the strongest monthly expansion of private sector business activity
since July.

But Markit noted that the upturn in December was not enough to
prevent the all-sector index registering the weakest quarterly expansion
since Q2 2009 in the final three months of the year. At 51.8, down from
52.5 in the third quarter, the average index reading for the fourth
quarter is roughly consistent with stagnation of GDP.

–London newsroom 0044 207 862 7491; email: dthomas@marketnews.com

[TOPICS: M$B$$$,MABDS$]