UK June final services PMI 47.1 vs 47.0 prelim
Latest data released by Markit/CIPS - 3 July 2020
- Composite PMI 47.7 vs 47.6 prelim
The preliminary report can be found here. Little change compared to the initial estimates, as this just reaffirms a modest bounce in UK business activity relative to May and after the historic slump seen back in April.
Much like the euro area report earlier, demand conditions continue to remain subdued and will prove to be a major headwind for the economy in its path to a faster recovery in the coming months.
We'll have to see how things play out in the coming weeks with the UK set to lift more strict lockdown measures starting from tomorrow onwards.
Markit notes that:
"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. The proportion of service providers reporting a drop in business activity has progressively eased after reaching a peak of 79% in April. Around 33% of the survey panel signalled a reduction in business activity during June, which compared with 54% in May.
"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. However, lockdown measures continued to hold back travel and leisure, while companies across all main categories of service activity commented on subdued underlying business and consumer spending in the wake of the COVID-19 pandemic.
"The latest UK Services PMI data highlighted another steep decline in employment numbers, despite a rebound in business expectations for the year ahead. Service providers widely commented on fears of a slow recovery in customer demand and an immediate need to reduce overheads. Moreover, survey respondents often noted the high cost of adapting operations during the COVID-19 pandemic, coupled with constrained business capacity and difficulties passing on rising expenses to clients."