United Kingdom: Services and manufacturing PMIs pick up in February
February 19, 2021
The IHS Markit/CIPS UK services Purchasing Managers’ Index (PMI) rose from 39.5 in January to 49.7 in February. While the hospitality sector remained downbeat amid ongoing lockdown measures, business and financial services activity recovered somewhat. It should be noted that the PMI does not contain public services such as education and health, which were likely depressed through February due to the lockdown.
Meanwhile, the manufacturing PMI rose from 54.1 in January to 54.9 in February. However, the reading was flattered by rising delivery times artificially boosting the headline reading. Normally, longer delivery times are indicative of strong demand, although in February they were attributed in part to shipping delays and Brexit-related trade frictions. The underlying health of the manufacturing sector worsened, with firms hit by Brexit-related export losses, and output growth weakening.
Chris Williamson, chief business economist at IHS Markit, stated:
“Although the data hint at a renewed contraction of the economy in the first quarter, business expectations for the year ahead improved to the highest for almost seven years, suggesting the economy is poised for recovery. Confidence continued to be lifted by hopes that the vaccine roll-out will allow virus related restrictions to ease, outweighing concerns among many other firms of the potential further damaging impact of Brexit-related trading issues.”