Monday 23 October 2017

Weak domestic demand keeps growth in services sector sluggish

Growth in the services sector slowed for the second month in a row last month, according to NCB Stockbrokers.

This was due to weak domestic demand.

However, a slight expansion in new export orders kept the sector from contracting.

This was according to the NCB Purchasing Managers' Index slipped to 51.1 from 51.7 in July. A reading above 50 signals growth and one under 50 signals contraction.

NCB said that business confidence fell to its lowest level since November 2010.

The new export orders sub-index rose slightly to 50.4 from 49.6 in July, with increased demand from the Middle East, the UK and the US.

But the new orders index, which also includes the domestic market, contracted for the fourth month in a row.

'Exports are once again the main driving force behind the expansion in activity with new export business up,' according to Brian Devine, economist at NCB Stockbrokers.

'The familiar two-tiered story is evident again as domestic demand caused new business orders generally to decline despite the rise in export orders.'

Higher fuel and energy costs were the main reason for a slight increase in input prices last month.

And companies continued to lower their output prices due to intense competition and falling demand.

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