United Kingdom: Composite PMI eases in January
The IHS Markit/CIPS Flash Composite Purchasing Managers’ Index (PMI) came in at 53.4 in January, down from December’s 53.6. January’s result marked the weakest reading since February. As such, the index remained above the 50-threshold, pointing to a continued, albeit moderating, improvement in business conditions from the previous month.
The Manufacturing PMI came in at 56.9 in January, down from December’s 57.9. Meanwhile the Services PMI fell to 53.3 in January (December: 53.6). On the manufacturing front, production growth accelerated on an improved availability of materials. That said, momentum in new orders eased. Meanwhile, the services sector was dampened by weakness in customer-facing sectors amid the spread of Omicron, with consumers exercising greater caution and forced to self-isolate as a result. On the price front, input cost inflation accelerated in the private sector as a whole, as stronger price pressures in the services sector more than offset weaker price pressures in the manufacturing sector. Finally, business sentiment improved.
Regarding the near-term outlook, Chris Williamson, chief business economist at IHS Markit, commented:
“Looking ahead, while the Omicron wave meant the hospitality sector has sunk into a third steep downturn, these restrictions are now easing, meaning this downturn should be brief. Many business and financial services companies have meanwhile been far less affected by Omicron, and saw business growth accelerate at the start of the year.”