UK Services industry contracted sharply in March 2020
According to the most recent PMI survey, the UK’s Services industry contracted 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 03/04/20 covers Services, such as the Financial and Legal sectors.
• The figure for March was 34.5
• The figure for February was 53.2
• Therefore our Services sector contracted massively from February to March.
According to IHS/Markit, the figures mean our Services sector faces;
“…the steepest downturn…for more then two decades…the slump in activity was almost exclusively linked by survey respondents to business shutdowns and cancelled orders in response to the Coronavirus disease 2019 (COVID-19) pandemic.”
So, the UK figure was 34.5. How did other similar countries do?
• France – 27.4
• Germany – 31.7
• Italy – 17.4
• Japan – 33.8
• Ireland – 32.5
So, although the PMI survey is just that, a survey, it seems likely that our Services industry has contracted sharply in March.