Services sector activity shrinks again

Activity in the services sector shrank for the third month in a row in July, a new survey showed today.

The seasonally adjusted NCB services purchasing managers’ index, which provides a measure of the health of the private sector services industry, recorded a reading of 49.1, down from a reading of 49.7 in June.

New business fell during the month, with the index registering 49.5. However, new export orders still grew, at 55.7, the twelfth month of growth and the fastest rate recorded since February last year. Non euro zone markets were the biggest drivers of this growth, with respondents citing Australia and the UK as key markets.

Employment in the sector shrank to 48.3, the third month of contraction in a row. The exception was the financial services sector, which put in a reading of 54.3, the first increase since September 2011. In the telecoms and media sector, employment was stable, ending a recent run of increases in staffing levels.

Companies were also more confident in July, expecting an increase in activity over the coming year.

“The level of positive sentiment was slightly stronger than seen in June, but weaker than the series average,” NCB said.