Most of the headlines this week suggested that UK is recovering from the recession, which for me is still hard to believe. Story that caught my attention this week was the growth of service sector in the UK implying that recession might be UK’s past. Why this was so interesting to me is because my family owns a business in service sector in Serbia which is not doing that well in fighting the impact of economic crises.
The stories I read are from BBC News, Times Online and Telegraph. They are all very straight forward with the message they are want to get across and for the first time since I started writing this blog, I can say that all three sources I used seem to be objective and unbiased.
The story is that UK service sector “grew at its fastest rate for two years during September” from 54.1 in August to 55.3 in September. According to the Chartered Institute of Purchasing and Supply (CIPS) it is the fifth month above the 50 level and this is enough to indicate expansion in the sector. All three articles agree that particularly strong businesses within the sector are hotels, restaurants and companies offering services to other businesses (B2B). However as in the most cases in the economy there are winners and losers; “activity fell in transport, storage, communication and personal services”. Although further redundancies are expected which will increase the level of unemployment and it will be hard to predict if this growth in service sector is going to increase further or not. What I really liked about all three articles is that they all concluded the story by saying that one needs to be aware that even though service sector is doing great at the moment it does not give enough evidence that the overall economy will be doing the same. And that is exactly why I do not like to see so many headlines in the news suggestion that the recession is over when we still stand on ‘shaky’ grounds. I do agree that service sector play a big role in the economy, but all this upward movement has to be well examined and taken with caution. In my opinion all three sources did a very good job in term of getting the news across to the audience and they still gave few facts and quotations by experts in field that this news does not mean we are out of recession; it might imply that we are on a good path.
All three sources use a few numerical facts to back up their argument which also gives stories more certainty and weight. Colin Ellis at Daiwa Securities noted that “Even if the economy does not return to growth in the third quarter, joblessness is likely to rise for several months to come”. Both BBC News and Telegraph used the same quotation to explain that that are still weaknesses in the economy despite the significant rise in services sector. On the other hand Telegraph and Times Online use the same quote by Howard Archer, chief UK economist at HIS Global Insight. He gave the figures ‘cautious welcome and said “given the dominant role of the services sector in the UK economy, this strongly endorses belief that the economy returned to growth in the third quarter”. The language used is formal and clear; all articles explain the story really well so that even someone who is not from business/ economics or finance field can understand what is happening. I think that these stories were written because they are of the importance for UK’s economy and this increase in the performance of the sector has the impact on many businesses. In my own view it is not world breaking news, but it is still worthwhile communicating because service sector plays a big role in UK’s economy and therefore is likely to affect it to the great extend. BBC News and Times Online have very similar headlines both saying that there is a growth UK’s services sector. On the other hand, Telegraph chose to write a headline which states that there is service industry growth and implies that this reinforces belief that the recession is over.
This time it was hard to pick my favorite article because all three of them communicated the news clearly and objectively just as I like it. I still do think it is early to say what this increase will bring to UK’s economy since nowadays it is harder and harder to predict anything. UK out of recession certainly sounds good but the question remains: when?
Sources:
BBC News (2009). Two-year high for services growth
URL: http://news.bbc.co.uk/1/hi/business/8290336.stm
Times Online (2009). Growth of UK services hits two-year high
URL: http://business.timesonline.co.uk/tol/business/economics/article6861482.ece
Telegraph (2009). Services industry growth reinforces belief that the recession is over
A good improvement on your last blog with more of your own voice and opinion coming through. 7/10
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