IHS Markit’s PMI data shows that the services sector’s business activity demonstrated a “much weaker rise” in October, showing the slowest expansion rate for four months.
The research group also said the share of new jobs has fallen for the first time since June, with hospitality, transportation and leisure sectors “widely commenting.”
The IHS UK Services Division PMI in October adjusted for seasonal impacts was 51.4. Still growing – 50 is the cutoff for growth and losses, with October levels dropping significantly from 56.1 in September, below the October 3 Flash PMI reading.
Between business operations recovery and consumer activity, all possible causes of summer spikes pointed to move from nationwide lockdowns since the second quarter and policies designed to reinvigorate demand.
It is also worth noting that PMI data across the services sector overshadows the worst businesses: hoteliers, restaurants and the broader catering industry. Of these latter categories, survey respondents overwhelmingly said that COVID restrictions were introduced in October, and that demand for hospitality and leisure services has since intensified during the nationwide lockdown in November.
Commenting on the group’s data, Tim Moore, Economic Director at IHS Markit, said:
“October data shows that the UK’s services sector was stalling, even before the announcement of lockdown 2 in the UK, with stricter restrictions on hospitality, travel and leisure, and lowering demand for consumer-oriented businesses, partially offset by sustained expansion in areas related to digital services, business-to-business sales and housing market transactions.”
“The whole service department recorded the slowest output
Growth since June, while first new orders have declined
Time in 4 months. Lack of advanced bookings in some of the
The economy most affected by lockdown measures is
Extensive reporting on redundancy and another sharp fall
Total number of jobs will be employed by October. ”
“The lockdown in the UK in November and the worsening Covid-19 situation in other parts of Europe means that the UK economy appears to be on a double recession and a much more challenging path to a 2021 recovery this winter.”
