January 06, 2025 at 09:30AM
Final Services PMI 51.1 vs 51.4 expected and 50.8 prior.
Final Composite PMI 50.4 vs 50.5 expected and 50.5 prior.
Key Findings:
Employment declines for the third month in a row.
Marginal increase in business activity.
Input cost inflation accelerates to an eight-month
high.
Comment:
Tim Moore, Economics Director at S&P Global Market
Intelligence, said:
“The service sector ended last year with only a marginal
upturn in business activity and a near-stalling of incoming
new work. Survey respondents suggested that falling
business and consumer confidence, largely due to worries
about domestic economic prospects in 2025, had led to
a considerable loss of growth momentum. While most
parts of the UK service economy noted weak demand and
cutbacks to client budgets, there remained pockets of
strong growth in areas such as technology services.
A post-Budget slump in business optimism persisted
in December, with output growth expectations for the
year ahead unchanged from November’s 23-month
low. Concerns about the impact of rising payroll costs,
alongside a general unease about the climate for
business investment, were reported as the main factors
weighing on prospects for growth in 2025.
Rising input price inflation added to the gloomy near-
term outlook for service providers, with overall cost
pressures reaching an eight-month high in December.
Prices charged inflation meanwhile intensified at the end
of last year and remained well in excess of pre-pandemic
trends.
Faced with subdued demand conditions and hikes to
employment costs, many service providers opted to
curtail their staff hiring and delay backfilling roles in
December. Nearly one-in-four survey respondents saw
an overall decline in their payroll numbers. Excluding
the pandemic, this represented the steepest pace of job
shedding for more than 15 years.”
This article was written by Giuseppe Dellamotta at www.forexlive.com.
