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Credit Monitoring Could Sustain Service Sector Momentum

A solid performance by the services sector could put the economy on track for sustained growth.

 

While the manufacturing and construction industries slow down, the service sector has picked up the pace. The sector lost some momentum during the cold weather back in March, but the warm summer nights have allowed restaurants to recoup their losses.

It has been a tough few months for services, with low profits forcing many restaurant chains into insolvency and restructuring procedures. Household names such as Prezzo and Jamie’s Italian have been forced to close branches to satisfy arrangements with creditors.  Now that conditions have improved, those that have survived have come back fighting.

The Purchasing Managers Index (PMI) from IHS Markit increased to 54.3 in August, compared to 53.5 back in July. This uplift was largely on account of an acceleration in new orders and recruitment.

While economists are hopeful that this could improve the general health of the economy, the business landscape is still overrun with uncertainty and low demand. While consumers have been more eager to venture outside in warmer weather, sluggish wage growth and smaller pay packets have significantly diminished footfall.

 

Ruth Gregory, of Capital Economics, said: “Encouragingly, the forward-looking indicators suggest that the sector should maintain its current pace of growth over the coming months too.

“The new orders index rose, while the increase in the employment index also indicated that firms remain confident enough in the outlook for demand to pick-up the pace of hiring.”

At the Credit Protection Association, many of our Members either supply the service industry or trade within it. With anxiety still directed at Brexit, business sectors are struggling to attain prosperity. Services are performing better than most, but there is a far way to go.

CPA provides its Members with important credit monitoring services, affording them the foresight to spot incoming danger as well as recoup on losses. Our credit reports, credit rating information, company databases and County Court data allow business to continue as usual and prevent our Members from becoming the high street’s latest victim.

 

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