Storbritannia - Service PMI

The IHS Markit/CIPS Flash UK Services PMI edged down to 49 in December of 2019 from 49.3 in November, below market expectations of 49.6. It is the deepest contraction in the services sector in nine months. New business volumes stabilised in December, which ended a three-month period of reduction. There were signs that the improved trend for new work had been achieved through discounting strategies and a greater squeeze on margins. Reflecting this, average prices charged by service providers increased at the slowest rate since February 2016. In contrast, input cost inflation remained strong and picked up slightly since November.

The IHS Markit/CIPS UK Services PMI was revised higher to 49.3 in November 2019 from a preliminary estimate of 48.6, but remained below October's final reading of 50.0. Business activity declined the most in eight months and new work dropped at the fastest rate since July 2016, with new orders from abroad posting the sharpest fall since this index began in September 2014 due to a lack of clarity in relation to Brexit. Despite a sustained decline in workloads, latest data revealed a stabilisation in staffing numbers across the service economy. On the price front, input cost inflation was the weakest since August 2016 while prices charged rose only modestly, which suggested that subdued demand conditions continued to squeeze operating margins. Looking ahead, business confidence hit a four-month high.

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The IHS Markit/CIPS UK Services PMI fell to 48.6 in November 2019 from 50 in the previous month and missing market forecasts of 50, a flash estimate showed. The latest reading pointed to the steepest contraction in the services sector since July 2016, as new orders declined for the third consecutive month, partly reflecting the sharpest fall in export orders since the beginning of 2019. Service providers continued to link weaker demand to domestic political uncertainty and subdued consumer spending patterns. Meantime, operating expenses rose at the softest pace since August 2016; and lower non-staff costs offset some of the pressure from rising salary payments.

The IHS Markit/CIPS UK Services PMI rose to 50.0 in October 2019 from 49.5 in the previous month and above market expectations of 49.7, signalling no change in service sector output. The latest figure was among the lowest registered in the past ten-and-a-half years amid uncertainty surrounding Brexit, as intakes of new business fell for the second straight month and the level of outstanding business declined for the thirteenth consecutive month. Employment also continued to drop, but at a slower pace. On the price front, input cost inflation remained above the long-run survey average, but eased to an 18-month low, on the back of wages and salaries, fuel, energy, foodstuffs and imported items. Charges rose on average, but at a rate little-changed from September's 38-month low. Looking ahead, business confidence improved to a three-month high, as some firms mentioned that uncertainty would be reduced following any resolution to Brexit in early-2020.

The IHS Markit/CIPS UK Services PMI dropped to 49.5 in September 2019 from 50.6 in the previous month and below market consensus of 50.3. The latest reading signalled a decline in service sector output, amid lower volumes of both new and outstanding business, with firms reporting that heightened uncertainty around Brexit had led to the postponement of orders by clients. In addition, new export business contracted at the fastest pace since March while employment fell for the first time in five months, and at the fastest rate since August 2010. On the price front, average input prices continued to rise sharply on the back of energy/fuel, salaries, food and the weakness of sterling. Prices charged by service providers rose the least since July 2016, pointing to stronger competition for sales amid weak demand. Looking ahead, business expectations were the weakest since July 2016 following the EU referendum, and the second-lowest since March 2009.