Investing.com - Activity in the U.K.’s dominant services sector expanded at the slowest rate in six months in December, but confidence rose and the rate of economic growth still seems likely to have accelerated in the fourth quarter of 2013.
The Markit/CIPS Services Purchasing Managers Index declined to a six month low of 58.8 in December from 60.0 in November. Analysts had expected an unchanged reading.
The index still remained well above the 50.0 level that indicates expansion and the report said confidence rose to the highest level since March 2010, driven by an increase in new orders.
Markit said growth in activity was driven by an increase in new business, which rose continuously throughout 2013. It said the average growth rate in the final quarter of the year was the best in the history of the survey, despite December registering the weakest increase in new work for three months.
“Although growth of business activity slowed, it's come down from super-strong levels and the pace of expansion remains elevated. Combined with still- strong growth in manufacturing and services, the PMI surveys suggest that the pace of economic growth will have accelerated in the fourth quarter from the 0.8% expansion seen in the third quarter,” Markit's Chief Economist, Chris Williamson said.
"If the buoyancy of the surveys in the fourth quarter is borne out by the official data, the economy will have grown by 1.9% over the course of 2013; which would be the best we've seen since 2007."
The report came after data last week showed that manufacturing and construction sector activity continued to grow at a rapid pace in December, but lost momentum from the previous month.
The Markit/CIPS Services Purchasing Managers Index declined to a six month low of 58.8 in December from 60.0 in November. Analysts had expected an unchanged reading.
The index still remained well above the 50.0 level that indicates expansion and the report said confidence rose to the highest level since March 2010, driven by an increase in new orders.
Markit said growth in activity was driven by an increase in new business, which rose continuously throughout 2013. It said the average growth rate in the final quarter of the year was the best in the history of the survey, despite December registering the weakest increase in new work for three months.
“Although growth of business activity slowed, it's come down from super-strong levels and the pace of expansion remains elevated. Combined with still- strong growth in manufacturing and services, the PMI surveys suggest that the pace of economic growth will have accelerated in the fourth quarter from the 0.8% expansion seen in the third quarter,” Markit's Chief Economist, Chris Williamson said.
"If the buoyancy of the surveys in the fourth quarter is borne out by the official data, the economy will have grown by 1.9% over the course of 2013; which would be the best we've seen since 2007."
The report came after data last week showed that manufacturing and construction sector activity continued to grow at a rapid pace in December, but lost momentum from the previous month.