Latest data released by Markit/CIPS - 24 March 2020

  • Prior 53.2
  • Manufacturing PMI 48.0 vs 45.0 expected
  • Prior 51.7
  • Composite PMI 37.1 vs 45.0 expected
  • Prior 53.0

Record low prints for both the services and composite readings as the virus outbreak is already taking a heavy toll on the UK economy, with business activity seeing its fastest downturn in the series' history since 22 years ago.

On the services side, global lockdown and containment efforts have stemmed demand and the situation looks even more dire when you consider that the data here is collected before the UK government has ordered closure of restaurants and other leisure businesses.

On the manufacturing side, production fell at its quickest pace since July 2012 with new orders declining at its sharpest rate since the global financial crisis.

However, the headline reading - much like Germany - flatters to deceive as it is artificially boosted by longer suppliers' delivery times due to severe supply chain disruptions.

Markit notes that:

"The surveys highlight how the COVID-19 outbreak has already dealt the UK economy an initial blow even greater than that seen at the height of the global financial crisis. With additional measures to contain the spread of the virus set to further paralyse large parts of the economy in coming months, such as business closures and potential lockdowns, a recession of a scale we have not seen in modern history is looking increasingly likely."Historical comparisons indicate that the March survey reading is consistent with GDP falling at a quarterly rate of 1.5-2.0%, a decline which is sufficiently large to push the economy into a contraction in the first quarter. However, this decline will likely be the tip of the iceberg and dwarfed by what we will see in the second quarter as further virus containment measures take their toll and the downturn escalates."Any growth was confined to small pockets of the economy such as food manufacturing, pharmaceuticals and healthcare. Demand elsewhere has collapsed, both for goods and services, as increasing numbers of households and businesses at home and abroad close their doors."

The full report can be found here.