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United Kingdom PMI May 2020

United Kingdom: Services and manufacturing PMIs recover somewhat in May but remain deep in contractionary territory

The IHS Markit/CIPS UK services Purchasing Managers’ Index (PMI) rose from a revised 13.4 in April (previously reported: 12.3) to 27.8 in May. The manufacturing PMI increased from 32.6 in April to 40.6 in May.

Output, new orders and employment continued to decline sharply in May, albeit to a lesser extent than in April, amid ongoing lockdown measures. Input prices fell on lower fuel and wage costs, which coupled with weak demand fed into lower output charges.

Regarding the outlook for the economy, Chris Williamson, chief business economist at IHS Markit, commented: “This remains a shockingly broad-based downturn with very few companies left unscathed by the COVID-19 pandemic. An improvement in business confidence about the year ahead for a second successive month is welcome news, and the easing of restrictions in coming months should help boost activity in some sectors as we head into the summer. However, the UK looks set to see a frustratingly slow recovery, given the likely slower pace of opening up the economy relative to other countries which have seen fewer COVID-19 cases”.

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