UK economy contracted in March 2020

canary wharf image

According to the most recent PMI survey, the UK’s Manufacturing and Service industries contracted (were smaller than before) in March 2020.

What are the figures?

The PMI surveys are put together by a research group called IHS\Markit. These surveys are considered as a respected source of research that asks companies how they are doing; for example whether orders and sales are up or down. Whilst the PMI surveys are not official economic statistics, they are a useful indicator of how things might be going, and are released before the official numbers.

IHS\Markit issue an index number for each survey. If the number is 50 or higher, it means that the economy is growing. If the number is 49.9 or less, it means the economy is contracting.

Some surveys cover all of the economy, some cover only certain sectors.

The survey issued on 3rd April covers March 2020
• The UK overall figure for march is 36
• The previous figure for February was 53
• So, our economy has contracted sharply between February and March.

According to IHS/Markit, the impact of efforts to battle Coronavirus are behind the figures;

“It’s increasingly difficult to find the words…as every region in the World fights to save human life as the first priority. The likelihood of a global recession is now a given…”

Comparison

So, the UK figure was 36. How did other similar countries do?
• Eurozone – 29.7
• France – 28.9
• Germany – 35
• Italy – 20.2
• Japan – 36.2
• USA – 40.5
• Canada- 46.1
• Ireland – 37.3

Summary

So, although the PMI survey is just that, a survey, it seems likely that our economy has shrunk in March 2020.

Sources

https://www.markiteconomics.com/Public?language=en