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United Kingdom PMI December 2020

United Kingdom: Services and manufacturing PMIs pick up in December

The IHS Markit/CIPS UK services Purchasing Managers’ Index (PMI) rose from 47.6 in November to 49.9 in December. The rise was likely driven by the easing of lockdown measures in early December, with the move from the national lockdown to localized restrictions in England. However, the service sector remained downbeat.

Meanwhile, the manufacturing PMI rose from 55.6 to 57.3, an over three-year high, although the improved performance was partly linked to Brexit-related stockpiling. Supply chains became stretched in December amid congestion at UK ports, with one of the largest increases in lead times since the PMI survey began in 1992. Across the private sector as a whole, the rate of job shedding eased in December, while input cost inflation accelerated.

Chris Williamson, chief business economist at IHS Markit, stated:

“The UK economy returned to growth in December after the lockdown-driven downturn seen in November, adding to signs that the hit to the economy from the second wave of virus infections has so far been far less harsh than the first wave in the spring. “The recovery lacked vigour, however, as the service sector remained under particular strain, contracting marginally again as ongoing social distancing measures due to tiered lockdowns continued to hit many parts of the economy. Consumer-facing services, notably hotels, restaurants and tourism, reported further marked declines in output.”

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