Business outlook optimism ‘lowest’ this year as employment levels continue on downward trend
Business activity is subsiding for the third month in a row as cost-of-living concerns, high-interest rates, and poor consumer confidence continue to create headwinds.
S&P Global and the Chartered Institute of Procurement and Supply’s (CIPS) composite flash purchasing managers’ index (PMI) for October hit 49.5, up from 49.3 in September.
A score below 50 indicates a contracting industry, whereas above 50 would indicate growing.
However, the past few months have been crowded with tight consumer budgeting and unfavourable economic concerns.
Tim Moore, economics director at S&P Global Market Intelligence, said: “A shallow downturn in UK service sector activity persisted in October as businesses struggled to make headway against a backdrop of worsening domestic economic conditions and stretched household budgets.
“Forward-looking survey indicators suggested that service providers will continue to skirt with recession.
“The degree of optimism towards the business outlook was the lowest in 2023 so far, despite relief that interest hikes have taken a pause this autumn.”
Employment levels continued on a downward trend for the second month, John Glen, chief economist at the Chartered Institute of Procurement & Supply (CIPS), said.
He added: “The challenges appearing over the horizon are maintaining a chokehold on firms preventing
them from expanding their operations until the fog of indecision around where the opportunities lie in the coming months lifts.”