Private-sector activity contracts again in August - PMI

European Central Bank is seen ahead of a news conference on the outcome of the Governing Council meeting outs

European Central Bank is seen ahead of a news conference on the outcome of the Governing Council meeting outs

If the ONS reports that the economy registered a consecutive drop in GDP during the three months from July to September, then the United Kingdom will be officially in recession.

South African private sector activity remained in contraction for a fourth consecutive month in August as new orders and output fell, albeit at slower rates, a survey showed on Wednesday.

The reading on the IHS Markit/Cips services purchasing managers index sank to 50.6 in August, from 51.4 a month earlier - below the forecasts of City economists polled by Reuters.

"After surveys indicated that both manufacturing and construction remained in deep downturns in August, the lack of any meaningful growth in the service sector raises the likelihood that the United Kingdom economy is slipping into recession", IHS Markit chief business economist Chris Williamson said.

Although the two surveys combined point to another round of job gains, a retreat in the rate of employment expansion highlights a wait-and-see approach among businesses, longing for a meaningful and sustained pick-up in demand growth.

The PMI is based on a survey carried out by IHS Markit covering 400 private services companies in India representing a wide-spectrum of segments but excluding retail.

With the U.K.'s path out of the European Union still unclear, and the prospect of a general election growing, IHS Markit's chief business economist said a rebound in activity is unlikely over coming months.

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Business morale across the service sector worsened to hit its lowest level in nearly five years and the loss of confidence could slow down investment and job creation in coming months. Growth lost momentum in both the manufacturing and service economies.

India's economy grew at an annual rate of 5% in the last quarter, its slowest in more than six years.

Despite the decline, service providers remained confident of a rise in business activity in the coming 12 months, with optimism strengthening to a one-year high.

A day later, the PMI for construction firms revealed that builders had suffered the sharpest drop in new orders since the depths of the financial crisis in July.

That way, PMI for manufacturing as well as services in August did not show any turnaround in the economy.

He added: "The August decline in the all-sector PMI has pushed the surveys further into territory that would normally be associated with looser monetary policy".

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