The July PMI report on activity in the services sector from Investec reveals a moderation in the rate of growth in activity to the slowest since February 2014. The headline PMI came in at 59.5 in July, down from June’s 61.2, but still extending the run of 50+ readings to four years in a row.

For the second successive month a slight weakening in new business was posted, but even so approximately twice as many panellists surveyed reported a rise in new business last month as against those that posted a fall.

The new export business index rose faster than in June, a somewhat surprising result given the ‘Brexit’ vote in Britain, according to Investec. The strength in new orders appears to have come from mainland Europe and Asia.

Brexit had other positive effects, too. While input costs rose, they did so more slowly in July, with some firms reporting benefits from the drop in sterling’s value against the euro.

Service companies were able to pass on at least a portion of the latest rise in costs by increasing prices, and the profitability index expanded at a solid pace, as it has for 32 successive months.

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Business confidence ticked up slightly in July, after having dropped to a 34-month low in the previous month. Optimism reflected expected improvements in wider economic conditions and business expansion plans.

After having fallen sharply in the previous month, the future activity index recovered some ground in July but remained slightly below its average level. Service providers were optimistic that business activity would increase over the coming 12 months.

Expected improvements in wider economic conditions was one factor supporting this sentiment, with business expansion plans and the launch of new products also mentioned. A number of respondents, however, highlighted uncertainty linked to the result of the Brexit referendum.

Although staffing levels continued to increase at a marked pace in July, the rate of job creation eased for the second month running and was much weaker than in May. In fact, the rise in employment was the slowest since May 2013. Staffing levels have now increased in each of the past 47 months.

According to panellists who took on extra staff during the month, this was in line with higher new business. Around one-fifth of panellists increased employment in July, compared with 8% that shed staff.