The UK services sector activity witnessed an unexpected downturn and entered into the contraction territory in the month of March, the latest survey report from Markit Economics showed this Wednesday.
The headline seasonally adjusted IHS Markit/CIPS UK Services PMI Index slipped to 48.9 in March vs. 51.3 booked in the previous month while surprising the markets to the downside (50.9 expected).
Key Points:
Slight reduction in service sector activity.
New orders fall for the third month running in March.
Prices charged increase at the slowest pace since June 2017.
Chris Williamson, Chief Business Economist at IHS Markit, which compiles the survey, noted:
“A drop in service sector activity indicates that UK GDP contracted in March, with the economy stalling over the first quarter as a whole and at risk of sliding into a deepening downturn in coming months. Both the services and construction sectors are now in decline and manufacturing is only expanding because of emergency stockpiling ahead of Brexit.”
“The underlying picture of demand is even worse than the headline numbers suggest. Service sector order books have contracted at the steepest rate since the height of the global financial crisis in 2009 so far this year, with companies reporting that Brexit uncertainty has dampened demand and led to cancelled or deferred spending, exacerbating a headwind from slower global economic growth.”
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