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You can find the current article at its original source at https://www.theguardian.com/business/live/2018/sep/05/trade-war-fears-markets-china-economy-uk-services-pmi-business-live
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| UK companies struggle to hire staff amid Brexit uncertainty – business live | UK companies struggle to hire staff amid Brexit uncertainty – business live |
| (35 minutes later) | |
| Duncan Brock, group director at the Chartered Institute of Procurement & Supply, is concerned that UK firms can’t find the staff the need. | |
| Here’s his take on the PMI report: | |
| “The services sector was a little more upbeat than the other sectors this month maintaining a steady level of activity growth, and the number of new orders ticked higher. | |
| “Despite this, optimism was more subdued and lower than the survey average. With the weakest business optimism since March, uncertainty around the UK’s decision to leave the EU continued to dampen client operations. Struggles around securing talent and the right skills were also a drag on a sector highly-dependent on trained staff even though job creation rose to its highest levels for half a year. | |
| UK firms are also suffering from uncertainty over Britain’s exit from the EU. | UK firms are also suffering from uncertainty over Britain’s exit from the EU. |
| Business confidence about future prospects hit the lowest level since March, today’s PMI report shows. | Business confidence about future prospects hit the lowest level since March, today’s PMI report shows. |
| That’s due to “political uncertainty and the unpredictable impact of Brexit on clients’ business operations.” | That’s due to “political uncertainty and the unpredictable impact of Brexit on clients’ business operations.” |
| Chris Williamson of Markit adds: | Chris Williamson of Markit adds: |
| “Business expectations for the year ahead meanwhile sank markedly lower, down across all three sectors to one of the lowest levels seen since the EU referendum, largely reflecting increased anxiety over Brexit negotiations. | “Business expectations for the year ahead meanwhile sank markedly lower, down across all three sectors to one of the lowest levels seen since the EU referendum, largely reflecting increased anxiety over Brexit negotiations. |
| “Given the increasingly unbalanced nature of growth and the darkening business mood, risks to the immediate outlook seem tilted to the downside.” | “Given the increasingly unbalanced nature of growth and the darkening business mood, risks to the immediate outlook seem tilted to the downside.” |
| Good news for UK workers -- the staff shortage is forcing some services firms to pay them more. | Good news for UK workers -- the staff shortage is forcing some services firms to pay them more. |
| Markit says: | Markit says: |
| Difficulties recruiting suitably skilled staff contributed to higher salary payments in August. | Difficulties recruiting suitably skilled staff contributed to higher salary payments in August. |
| Breaking: Growth in Britain’s service sector rose last month...but firms are finding it harder to recruit the workers they need. | Breaking: Growth in Britain’s service sector rose last month...but firms are finding it harder to recruit the workers they need. |
| That’s according to data firm Markit’s monthly survey of Britain’s services companies. | That’s according to data firm Markit’s monthly survey of Britain’s services companies. |
| Purchasing managers from large and small UK service firms reported that business activity rose at a faster rate in August, partly thanks to a boost in new work. | Purchasing managers from large and small UK service firms reported that business activity rose at a faster rate in August, partly thanks to a boost in new work. |
| However, many also said that “a lack of suitably skilled candidates to fill vacancies had held back staff hiring”. That staff shortage held some firms back. | However, many also said that “a lack of suitably skilled candidates to fill vacancies had held back staff hiring”. That staff shortage held some firms back. |
| Markit explains: | Markit explains: |
| Backlogs of work increased for the fourth month running in August, which pointed to sustained pressure on operating capacity at service sector companies. A number of firms linked rising volumes of unfinished business to difficulties replacing departing staff. | Backlogs of work increased for the fourth month running in August, which pointed to sustained pressure on operating capacity at service sector companies. A number of firms linked rising volumes of unfinished business to difficulties replacing departing staff. |
| This may be a sign that EU workers are heading home ahead of Brexit, or that potential migrants aren’t coming over the UK at all. Last month’s unemployment figures showed a record annual decline in migrants from the European Union to the UK. | This may be a sign that EU workers are heading home ahead of Brexit, or that potential migrants aren’t coming over the UK at all. Last month’s unemployment figures showed a record annual decline in migrants from the European Union to the UK. |
| Britain’s unemployment rate is also at a 43-year low, so firms may simply be suffering from a tight labour market. | Britain’s unemployment rate is also at a 43-year low, so firms may simply be suffering from a tight labour market. |
| Overall, Markit’s UK service PMI jumped to 54.3 in August, up from 53.5 in July -- the second highest level since February. That shows faster growth. | Overall, Markit’s UK service PMI jumped to 54.3 in August, up from 53.5 in July -- the second highest level since February. That shows faster growth. |
| More to follow.... | More to follow.... |
| Just in: Britain’s car sales rose by almost a quarter in August. | Just in: Britain’s car sales rose by almost a quarter in August. |
| Just over 94 thousand new cars were registered in the UK last month, a jump of 23.1% compared to August 2017. | Just over 94 thousand new cars were registered in the UK last month, a jump of 23.1% compared to August 2017. |
| That sounds impressive... until you remember that August is typically a quiet month for car sales (drivers who wait until September will get the new year’s number plate). | That sounds impressive... until you remember that August is typically a quiet month for car sales (drivers who wait until September will get the new year’s number plate). |
| Despite this jump, registrations in 2018 are still 4.2% lower than this stage last year, according to the Society for Motor Manufacturers and Traders. | Despite this jump, registrations in 2018 are still 4.2% lower than this stage last year, according to the Society for Motor Manufacturers and Traders. |
| But still, demand for hybrid and plug-in cars surged by 88.7%. One in 12 buyers chose an electric car - a new record. | But still, demand for hybrid and plug-in cars surged by 88.7%. One in 12 buyers chose an electric car - a new record. |
| The SMMT adds: | The SMMT adds: |
| Demand was up across the board, with consumers and fleets boosting year-on-year registrations by 23.3% and 19.7% respectively, while the smaller business sector rose 166.4%, equivalent to an uplift of around 1,500 units against August last year. | Demand was up across the board, with consumers and fleets boosting year-on-year registrations by 23.3% and 19.7% respectively, while the smaller business sector rose 166.4%, equivalent to an uplift of around 1,500 units against August last year. |
| Superminis remained the most popular buy, followed by small family and dual purpose cars, with the luxury saloon and city car segments recording the most notable growth, up 120.8% and 39.6%. | Superminis remained the most popular buy, followed by small family and dual purpose cars, with the luxury saloon and city car segments recording the most notable growth, up 120.8% and 39.6%. |
| European companies are also worried about trade wars. | European companies are also worried about trade wars. |
| Markit’s new survey of eurozone purchasing managers, just released, show that business expectations in the service sector hit a 21-month low in August. It blamed “geo-political trade tensions”. | Markit’s new survey of eurozone purchasing managers, just released, show that business expectations in the service sector hit a 21-month low in August. It blamed “geo-political trade tensions”. |
| More encouragingly, the euro-area private sector kept growing last month. But as this chart shows, Italy moved worryingly close to stagnation (which would be a PMI of 50). | More encouragingly, the euro-area private sector kept growing last month. But as this chart shows, Italy moved worryingly close to stagnation (which would be a PMI of 50). |
| Commodity prices are also being hit by the drop in Chinese company growth. | Commodity prices are also being hit by the drop in Chinese company growth. |
| The price of copper in Shanghai has hit a 14-month low, while prices in London are down 2.6%. | The price of copper in Shanghai has hit a 14-month low, while prices in London are down 2.6%. |
| This is dragging down the share prices of mining giants, and thus pulling Britain’s FTSE 100 down by 0.4% in early trading. | This is dragging down the share prices of mining giants, and thus pulling Britain’s FTSE 100 down by 0.4% in early trading. |
| Global stock markets are in the red this morning, as the slowdown across China’s companies worries investors. | Global stock markets are in the red this morning, as the slowdown across China’s companies worries investors. |
| The Shanghai Composite Index has dropped by 1.7%, while Hong Kong’s Hang Seng index has shed 2.7%. | The Shanghai Composite Index has dropped by 1.7%, while Hong Kong’s Hang Seng index has shed 2.7%. |
| Hong Kong stocks are heading for their biggest drop in a month https://t.co/IxkK4lXNGo pic.twitter.com/fKCTmZ4uRs | Hong Kong stocks are heading for their biggest drop in a month https://t.co/IxkK4lXNGo pic.twitter.com/fKCTmZ4uRs |
| Most European markets have opened lower too, with the Stoxx 600 index of major EU companies down almost 0.5%. | Most European markets have opened lower too, with the Stoxx 600 index of major EU companies down almost 0.5%. |
| Investors are fretting about trade, as Donald Trump could sign off an extra $200bn of tariffs on Chinese goods in the coming days. | Investors are fretting about trade, as Donald Trump could sign off an extra $200bn of tariffs on Chinese goods in the coming days. |
| US officials are also due to resume trade talks with Canada later today, as Michael Hewson of CMC Markets explains: | US officials are also due to resume trade talks with Canada later today, as Michael Hewson of CMC Markets explains: |
| The main preoccupation for investors continues to be on whether the US is serious about arriving at some form of deal with Canada over NAFTA in the wake of President Trump’s tweets at the weekend, that it wasn’t and isn’t a political necessity to get a deal | The main preoccupation for investors continues to be on whether the US is serious about arriving at some form of deal with Canada over NAFTA in the wake of President Trump’s tweets at the weekend, that it wasn’t and isn’t a political necessity to get a deal |
| In addition to that anxiety levels are growing ahead of the weekend and the possible imposition of another $200bn worth of tariffs on Chinese goods later this week. | In addition to that anxiety levels are growing ahead of the weekend and the possible imposition of another $200bn worth of tariffs on Chinese goods later this week. |
| Hong Kong’s companies are also feeling a chill from the US-China trade wars. | Hong Kong’s companies are also feeling a chill from the US-China trade wars. |
| Growth across Hong Kong’s private sector declined in August, data firm Markit says. Output and new orders both shrank, forcing job cuts. | Growth across Hong Kong’s private sector declined in August, data firm Markit says. Output and new orders both shrank, forcing job cuts. |
| It adds: | It adds: |
| Notably, export sales to China fell again amid escalating trade tensions. Companies remained pessimistic about future output, which was also accompanied by another drop in purchasing activity and input inventories. Consequently, firms reduced selling prices to support sales despite a further rise in input costs. Both employment and backlogs continued to decline. | Notably, export sales to China fell again amid escalating trade tensions. Companies remained pessimistic about future output, which was also accompanied by another drop in purchasing activity and input inventories. Consequently, firms reduced selling prices to support sales despite a further rise in input costs. Both employment and backlogs continued to decline. |
| Hong Kong’s private sector is on track for a second quarterly decline after latest #PMI data indicated another deterioration in business conditions in Aug. Other survey indicators suggest the downturn is likely to continue. More here: https://t.co/QRuELZ0hY3 pic.twitter.com/UGqpcr2MlT | Hong Kong’s private sector is on track for a second quarterly decline after latest #PMI data indicated another deterioration in business conditions in Aug. Other survey indicators suggest the downturn is likely to continue. More here: https://t.co/QRuELZ0hY3 pic.twitter.com/UGqpcr2MlT |
| Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business | Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business |
| Trade war anxiety is growing this morning, after China’s companies posted disappointing growth. | Trade war anxiety is growing this morning, after China’s companies posted disappointing growth. |
| Business activity growth across China hit a five-month low in August, a new survey from data firm Caixin shows. The country’s service sector led the slowdown, with growth hitting a 10-month low. | Business activity growth across China hit a five-month low in August, a new survey from data firm Caixin shows. The country’s service sector led the slowdown, with growth hitting a 10-month low. |
| Companies reported that new business growth was weak, forcing factory bosses to cut jobs. Business confidence was also subdued. | Companies reported that new business growth was weak, forcing factory bosses to cut jobs. Business confidence was also subdued. |
| Dr. Zhengsheng Zhong, Director of Macroeconomic Analysis at CEBM Group, says China’s economic growth is on a “downward trajectory”, adding: | Dr. Zhengsheng Zhong, Director of Macroeconomic Analysis at CEBM Group, says China’s economic growth is on a “downward trajectory”, adding: |
| Inflationary pressures were pronounced as increases in both input prices and output prices accelerated. The future output sub-index went up after falling in August, which was likely boosted by the fine-tuning of macro policies. The employment sub-index was unchanged from July’s reading and remained in contraction territory. | Inflationary pressures were pronounced as increases in both input prices and output prices accelerated. The future output sub-index went up after falling in August, which was likely boosted by the fine-tuning of macro policies. The employment sub-index was unchanged from July’s reading and remained in contraction territory. |
| “August’s PMI readings indicated that the effects of expansionary credit policy and active fiscal policy are yet to kick in. Signs of stagnation emerged as upward pressure on prices remained even though demand weakened at a faster rate.” | “August’s PMI readings indicated that the effects of expansionary credit policy and active fiscal policy are yet to kick in. Signs of stagnation emerged as upward pressure on prices remained even though demand weakened at a faster rate.” |
| The report suggests that the trade dispute with America is hitting demand and confidence. The US has already imposed tariffs on $50bn of Chinese imports, with president Donald Trump threatening more. | The report suggests that the trade dispute with America is hitting demand and confidence. The US has already imposed tariffs on $50bn of Chinese imports, with president Donald Trump threatening more. |
| Caixin’s Composite Output Index, which measures growth across Chinese companies, fell to a five- month low of 52.0 in August, with the services PMI hitting just 51.5 - the lowest since October 2017 (50 = stagnation). | Caixin’s Composite Output Index, which measures growth across Chinese companies, fell to a five- month low of 52.0 in August, with the services PMI hitting just 51.5 - the lowest since October 2017 (50 = stagnation). |
| Here are the key points from the report: | Here are the key points from the report: |
| Services activity growth edges down to ten-month low, while manufacturing output increases at faster pace | Services activity growth edges down to ten-month low, while manufacturing output increases at faster pace |
| Composite new work expands at weakest pace for over two years | Composite new work expands at weakest pace for over two years |
| Steeper rises in input costs across both the manufacturing and service sectors | Steeper rises in input costs across both the manufacturing and service sectors |
| Reaction to follow.... | Reaction to follow.... |
| Later today we discover how Britain, and the eurozone’s, service sector firms fared in August -- as company bosses watched the clock tick towards Brexit in March 2019. | Later today we discover how Britain, and the eurozone’s, service sector firms fared in August -- as company bosses watched the clock tick towards Brexit in March 2019. |
| Also coming up today... | Also coming up today... |
| Ten years after the financial crisis, a UK thinktank is proposing some radical changes to fix the economy’s problems. The IPPR is calling for higher wages, more government spending on infrastructure, extra wealth taxes and more power for workers, to tackle growing inequality. | Ten years after the financial crisis, a UK thinktank is proposing some radical changes to fix the economy’s problems. The IPPR is calling for higher wages, more government spending on infrastructure, extra wealth taxes and more power for workers, to tackle growing inequality. |
| The report comes out later today. Here’s the full story: | The report comes out later today. Here’s the full story: |
| The agenda | The agenda |
| 9am BST: UK new car registrations for August | 9am BST: UK new car registrations for August |
| 9am BST: Eurozone service sector PMI for August | 9am BST: Eurozone service sector PMI for August |
| 9.30am BST: UK service sector PMI for August | 9.30am BST: UK service sector PMI for August |
| 1.30pm BST: US trade figures for July | 1.30pm BST: US trade figures for July |
| 3pm BST: Bank of Canada’s interest rate decision | 3pm BST: Bank of Canada’s interest rate decision |