UK PMI Services rose to 50.0 in October, up from 49.5 and beat expectation of 49.6. It’s now back at 50.0 no-change market. However, new business falls for second month running. Expectations pick up slightly but remain subdued. All Sector PMI rose to 49.5, up from 48.8, but stayed below 50.
Chris Williamson, Chief Business Economist at IHS Markit, which compiles the survey:
“The UK PMI surveys collectively indicated a further overall decline in private sector output in October. Contractions have now been recorded in four of the past five months, marking the worst spell since 2009 during the global financial crisis.
“The seasonally adjusted IHS Markit/CIPS ‘all-sector’ Output Index rose from 48.8 in September to 49.5 in October, signalling a weaker rate of contraction, but the volume of new business fell at a pace similar to that seen in September.
“The October reading is historically consistent with GDP declining at a quarterly rate of 0.1%, similar to the pace of contraction in GDP signalled by the surveys in the third quarter. While official data may indicate more robust growth in the third quarter, the PMI warns that some of this could merely reflect a pay-back from a steeper decline than signalled by the surveys in the second quarter, and that the underlying business trend remains one of stagnation at best.”
