United Kingdom: Services and manufacturing PMIs plummet in January on fresh lockdown
The IHS Markit/CIPS UK services Purchasing Managers’ Index (PMI) fell from 49.4 in December to 38.8 in January, driven by the imposition of a third national lockdown. That said, January’s figure was still far above the 13.4 recorded in April 2020, highlighting companies’ increased ability to work around government-imposed restrictions.
As has been the case in recent months, the manufacturing sector was less affected by social distancing restrictions and performed more strongly than the services sector. Nevertheless, the manufacturing PMI still declined, from 57.5 to 52.9. Delivery times rose to a record high, linked to Brexit disruption, while exports declined following a front-loading of orders before the end of the Brexit transition period.
Chris Williamson, chief business economist at IHS Markit, stated:
“Encouragingly, the current downturn looks far less severe than that seen during the first national lockdown, and businesses have become increasingly optimistic about the outlook, thanks mainly to progress in rolling out COVID-19 vaccines. Business hopes for the year ahead have risen the highest for over six-and-a-half years, boding well for the economy to return to solid growth once virus restrictions ease.”