United Kingdom: Services and manufacturing PMIs rise in January as political uncertainty recedes
The IHS Markit/CIPS UK services Purchasing Managers’ Index (PMI) rose from a revised 50.0 in December (previously reported: 49.0) to 52.9 in January, the highest reading in over one year and above the threshold that separates expansion from contraction in activity. The IHS Markit/CIPS manufacturing PMI increased from a revised 47.5 in December (previously reported: 47.4) to 49.8 in January.
Service firms reported that greater political certainty following the general elections aided activity, although foreign sales were weak. Meanwhile, the manufacturing sector benefited from higher new orders and employment, partially offset by lower stocks of purchases. Taken together, the PMI readings suggest a brighter start to 2020, in line with our panelists’ forecast of an acceleration of GDP growth in Q1.
Duncan Brock, group director at the Chartered Institute of Procurement & Supply, commented:
“2020 has started on a positive note with this sudden change in momentum. However, that’s where the story will end until this uncorked trickle of new orders and activity turns into a flood for businesses hit by hesitancy in the last three years. Business activity will need to be buoyed up by the prospect of strong negotiations around the UK’s exit from the EU to return them to strength in the years to come.”