Latest data released by Markit/CIPS - 5 October 2021
- Composite PMI 54.9 vs 54.1 prelim
The preliminary report can be found here. A slight revision higher but while the growth expansion remains solid, it is slowing down noticeably as supply constraints weigh heavily on output and new orders towards the end of Q3.
Of note, prices charged inflation surged to a record high in September, accelerating sharply since August as cost pressures continue to escalate. With supply constraints and labour shortages still playing out, it is going to be a daunting winter up ahead.
Markit notes that:
"The supply chain crisis put a considerable brake on recovery in the UK service sector during September. Survey respondents widely noted that shortages of staff, raw materials and transport had resulted in lost business opportunities. Consequently, new orders expanded at the slowest pace since the end of the winter lockdown, while backlogs of work accumulated as service providers struggled to find candidates to fill vacancies.
"Another spike in operating expenses was reported in September, even though this data is yet to fully reflect the inflationary impact of the UK fuel crisis and surging energy prices at the end of the month. Higher wages were also a key reason for increased cost burdens in September.
"Tight constraints on business capacity and rampant supply chain uncertainty meant that service providers have become more willing to pass on higher costs to customers. The latest rise in average prices charged by UK service sector firms was the fastest in over 25 years of data collection, with many businesses reporting more frequent reviews of pricing due to escalating cost increases by suppliers."
