UK PMI: Historic slump in private sector activity levelled off in June
The historic slump in activity in the UK’s private sector levelled off last month as sections of the economy began to reopen following an easing of lockdown measures, new purchasing managers’ index (PMI) readings showed.
The final IHS Markit composite PMI reading for last month came in at 47.7 — slightly higher than the flash reading of 47.6 and well above May’s 30.0, but still below the 50 threshold that indicates growth.
The final PMI reading for the UK’s services sector rose to 47.1 in June from 29.0 the month before, again slightly higher than the preliminary reading of 47.0.
“June data highlights that the worst phase of the service sector downturn has passed as more businesses start to reopen and adapt their operations to meet social distancing requirements,” said Tim Moore, economic director at IHS Markit.
“Encouragingly, more than one-in-four service providers reported an expansion of new business during June, which was commonly attributed to pent-up demand and the phased restart of the UK economy,” he added.
The survey showed 33 per cent of services businesses — which account for the vast majority of Britain’s economy — reported a drop in activity, down from 54 per cent in May and 79 per cent in April. Some 28 per cent of services businesses reported a rise in activity.
“Survey respondents again cited highly subdued demand and disruptions related to the Covid-19 pandemic as factors constricting business activity in June,” the survey said.
“However, there were also reports that an easing of lockdown measures and reopening of the UK economy had a favourable impact on business activity,” it continued.
In June, the Bank of England said Britain’s economy looked to have shrunk by around 20 per cent in the first half of 2020 — a smaller decline than the central bank had first feared, but still one of the biggest annual drops in 300 years.
Chancellor Rishi Sunak is due to announce his next steps for steering the economy back towards recovery next week.