The year is off to a slower-than-expected start for the services industry.
Markit’s flash services purchasing manager’s index (PMI) came in a bit below expectations for January, at 53.7.
Economists had expected an index reading of 54, according to Bloomberg. A PMI reading above 50 indicates expansion.
According to the release, service-sector output grew at the weakest pace since December 2014.
“The data are by no means disastrous, signalling a 1.5% annualized rate of economic growth at the start of the year, but the drop in business confidence to one of its lowest levels for over five years suggests that firms are bracing themselves for worse to come,” said Chris Williamson, Markit’s chief economist, in the release.
However, it looks like much of the slowdown in business activity was because of a negative spillover from the energy sector. Businesses continued to say that the domestic economy was improving, otherwise.
Williamson said, “A struggling manufacturing economy is being accompanied by a services sector where growth showed further signs of losing momentum in January even before the bad weather hit.”