- Prior 49.9
- Manufacturing PMI 46.7 vs 45.5 expected
- Prior 45.3
- Composite PMI 47.8 vs 49.1 expected
- Prior 49.0
That’s a steep drop in UK services activity, with the headline reading slumping to a two-year low. There is a bit of reprieve in that manufacturing activity nudged higher but overall, the data highlights a further sustained downturn in the UK economy to start the new year. S&P Global notes that:
“Weaker than expected PMI numbers in January
underscore the risk of the UK slipping into recession.
Industrial disputes, staff shortages, export losses, the
rising cost of living and higher interest rates all meant the
rate of economic decline gathered pace again at the start
of the year. Jobs also continued to be lost as firms
tightened their belts in the face of these headwinds, though
many other firms reported being constrained by an
ongoing lack of available labour.
“There were some bright spots in the survey, including
improved business expectations for the year ahead and a
further cooling of inflationary pressures. The overall rate of
decline indicated also remains only modest. But this is
undeniably a disappointing start to the year for the UK,
reflecting not just short-term hits to growth such as strike
action and the rise in energy costs due to the Ukraine war,
but also highlighting the ongoing damage to the economy
from longer term structural issues such as labour
shortages and trade woes linked to Brexit .”