United Kingdom: Flash composite PMI falls to fresh record low in April
April 23, 2020
The IHS Markit/CIPS UK services Purchasing Managers’ Index (PMI) fell from a revised 34.5 in March (previously reported: 35.7) to a record low of 12.3 in April. The manufacturing PMI was down from a revised 47.8 (previously reported: 48.0) to 32.9.
Widespread shutdowns at home and abroad crushed activity and saw record falls in new orders and employment, although manufacturing firms in the medical supply and food and drink sectors, and service firms with links to online retail and the public sector, fared better than most. On the price front, both input and output prices declined amid cheap oil and weak demand spurring discounting.
Chris Williamson, chief business economist at IHS Markit, commented:
“Simple historical comparisons of the PMI with GDP indicate that the April survey reading is consistent with GDP falling at a quarterly rate of approximately 7%. The actual decline in GDP could be even greater, in part because the PMI excludes the vast majority of the self-employed and the retail sector, which have been especially hard-hit by the COVID-19 containment measures.”
Author: Oliver Reynolds, Economist