The IHS Markit/CIPS UK Services PMI was revised firmly higher to 50.0 in December 2019 from a preliminary estimate of 49.0 and above November's final 49.3, to signal a stabilisation of overall service sector activity. New work rose modestly following three months of decline, while export sales dipped for the fourth month running, linked to the lack of clarity in relation to Brexit. In addition, employment increased by the most since July while backlogs of work decreased for the fifteenth month in a row. On the price front, average cost burden inflation picked up from the 39-month low recorded in November, mostly attributed to stronger wage pressures, while price charge inflation slowed to its weakest since February 2016. Looking ahead, business optimism was the highest since September 2018 as firms predict a short-term boost to business activity when the first stage of Brexit is resolved. Services PMI in the United Kingdom averaged 53.63 points from 2007 until 2019, reaching an all time high of 62.50 points in October of 2013 and a record low of 40.10 points in November of 2008. source: Markit Economics

Services PMI in the United Kingdom is expected to be 50.40 points by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Services PMI in the United Kingdom to stand at 52.50 in 12 months time. In the long-term, the United Kingdom Services PMI is projected to trend around 52.90 points in 2020, according to our econometric models.

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United Kingdom Services PMI

Actual Previous Highest Lowest Dates Unit Frequency
50.00 49.30 62.50 40.10 2007 - 2019 points Monthly

News Stream
UK Services PMI at 9-Month Low
The IHS Markit/CIPS Flash UK Services PMI edged down to 49 in December of 2019 from 49.3 in November, below market expectations of 49.6. It is the deepest contraction in the services sector in nine months. New business volumes stabilised in December, which ended a three-month period of reduction. There were signs that the improved trend for new work had been achieved through discounting strategies and a greater squeeze on margins. Reflecting this, average prices charged by service providers increased at the slowest rate since February 2016. In contrast, input cost inflation remained strong and picked up slightly since November.

UK Services Activity Falls Less than Expected
The IHS Markit/CIPS UK Services PMI was revised higher to 49.3 in November 2019 from a preliminary estimate of 48.6, but remained below October's final reading of 50.0. Business activity declined the most in eight months and new work dropped at the fastest rate since July 2016, with new orders from abroad posting the sharpest fall since this index began in September 2014 due to a lack of clarity in relation to Brexit. Despite a sustained decline in workloads, latest data revealed a stabilisation in staffing numbers across the service economy. On the price front, input cost inflation was the weakest since August 2016 while prices charged rose only modestly, which suggested that subdued demand conditions continued to squeeze operating margins. Looking ahead, business confidence hit a four-month high.

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UK Services Activity Shrinks to Over 3-Year Low
The IHS Markit/CIPS UK Services PMI fell to 48.6 in November 2019 from 50 in the previous month and missing market forecasts of 50, a flash estimate showed. The latest reading pointed to the steepest contraction in the services sector since July 2016, as new orders declined for the third consecutive month, partly reflecting the sharpest fall in export orders since the beginning of 2019. Service providers continued to link weaker demand to domestic political uncertainty and subdued consumer spending patterns. Meantime, operating expenses rose at the softest pace since August 2016; and lower non-staff costs offset some of the pressure from rising salary payments.

UK Service Sector Output Unchanged in October
The IHS Markit/CIPS UK Services PMI rose to 50.0 in October 2019 from 49.5 in the previous month and above market expectations of 49.7, signalling no change in service sector output. The latest figure was among the lowest registered in the past ten-and-a-half years amid uncertainty surrounding Brexit, as intakes of new business fell for the second straight month and the level of outstanding business declined for the thirteenth consecutive month. Employment also continued to drop, but at a slower pace. On the price front, input cost inflation remained above the long-run survey average, but eased to an 18-month low, on the back of wages and salaries, fuel, energy, foodstuffs and imported items. Charges rose on average, but at a rate little-changed from September's 38-month low. Looking ahead, business confidence improved to a three-month high, as some firms mentioned that uncertainty would be reduced following any resolution to Brexit in early-2020.

UK Service Sector Activity Contracts in September
The IHS Markit/CIPS UK Services PMI dropped to 49.5 in September 2019 from 50.6 in the previous month and below market consensus of 50.3. The latest reading signalled a decline in service sector output, amid lower volumes of both new and outstanding business, with firms reporting that heightened uncertainty around Brexit had led to the postponement of orders by clients. In addition, new export business contracted at the fastest pace since March while employment fell for the first time in five months, and at the fastest rate since August 2010. On the price front, average input prices continued to rise sharply on the back of energy/fuel, salaries, food and the weakness of sterling. Prices charged by service providers rose the least since July 2016, pointing to stronger competition for sales amid weak demand. Looking ahead, business expectations were the weakest since July 2016 following the EU referendum, and the second-lowest since March 2009.

United Kingdom Services PMI
The Markit/CIPS UK Services PMI (Purchasing Managers' Index) is based on data collected from companies in the transport and communication sector, financial intermediation, business services, personal services, computing and IT and hotels and restaurants. The index tracks variables such as sales, employment, inventories and prices. A reading above 50 indicates that the services sector is generally expanding; below 50 indicates that it is generally declining. .

United Kingdom Business Last Previous Highest Lowest Unit
Business Confidence -44.00 -32.00 55.00 -75.00 points [+]
Manufacturing PMI 47.50 48.90 61.50 34.40 points [+]
Services PMI 50.00 49.30 62.50 40.10 points [+]
Industrial Production -1.60 -0.60 22.60 -12.00 percent [+]
Industrial Production Mom -1.20 0.40 9.70 -7.80 percent [+]
Manufacturing Production -2.00 -0.30 19.60 -16.90 percent [+]
Capacity Utilization 81.50 79.00 85.20 38.00 percent [+]
New Orders 10875.00 10922.00 25109.00 9381.00 GBP Million [+]
Factory Orders -28.00 -26.00 21.00 -79.00 Net Balance [+]
Changes in Inventories -8400.00 360.00 11359.00 -9083.00 GBP Million [+]
Bankruptcies 4355.00 4338.00 6924.00 924.00 Companies [+]
Corporate Profits 114104.00 111745.00 115312.00 1024.00 GBP Million [+]
Zew Economic Sentiment Index -38.30 -47.20 61.00 -80.60 [+]
Car Production 107753.00 134752.00 185157.00 43773.00 Units [+]
Car Registrations 148997.00 156621.00 562337.00 33051.00 [+]
Small Business Sentiment -34.00 -24.00 40.00 -69.00 [+]
Internet Speed 16920.86 16337.23 16920.86 3085.89 KBps [+]
IP Addresses 27493519.00 26782989.00 27493519.00 13305856.00 IP [+]
Mining Production -2.50 -6.80 855.60 -90.50 percent [+]
Leading Economic Index 0.10 0.20 2.00 -2.00 percent [+]
Private Investment 0.00 0.10 51.50 -11.40 percent [+]
Steel Production 550.00 621.00 2848.00 131.00 Thousand Tonnes [+]
Competitiveness Index 81.20 81.99 82.11 5.18 Points [+]
Competitiveness Rank 9.00 8.00 13.00 2.00 [+]
Composite Pmi 49.30 49.30 61.80 47.60 points [+]
Crude Oil Rigs 10.00 13.00 32.00 3.00 [+]
Ease of Doing Business 8.00 9.00 11.00 5.00 [+]
Electricity Production 24869.00 24791.00 38520.00 16152.00 Gigawatt-hour [+]
Corruption Index 80.00 82.00 87.00 74.00 Points [+]
Corruption Rank 11.00 8.00 20.00 8.00 [+]