BUSINESS UK private sector output declines for third month running

BUSINESS

UK private sector output declines for third month running

Xinhua

22:22, October 24, 2022

LONDON, Oct. 24 (Xinhua) -- Private sector output in the United Kingdom (UK) in October slowed for the third month running amid faltering economy, political chaos and high costs, a survey showed on Monday.

The S&P Global / CIPS Flash UK PMI Composite Output Index registered at 47.2 in October, down from 49.1 in September and reaching a 21-month low. The index has stayed below the neutral 50.0 no-change value in each month since August.

The latest reading signaled a modest reduction in output volumes and the speed of the downturn was the fastest since January 2021, the PMI survey showed. Aside from the COVID-19 pandemic-related lockdowns, the index was the lowest since March 2009.

Manufacturers saw a particularly steep fall in output during October, although the rate of decline eased slightly since September and was the least marked for three months. Many firms noted that supply shortages continued to hold back production volumes alongside a general slowdown in demand.

Business activity across the service economy declined for the first time in 20 months and at the fastest pace since January 2021, the survey showed. Squeezed household budgets, recession concerns and delayed business investment decisions due to political uncertainty were all cited as factors leading to lower output in October.

"October's flash PMI data showed the pace of economic decline gathering momentum after the recent political and financial market upheavals," Chris Williamson, chief business economist at S&P Global Market Intelligence, commented.

"The heightened political and economic uncertainty has caused business activity to fall at a rate not seen since the global financial crisis in 2009 if pandemic lockdown months are excluded. The gross domestic product (GDP) therefore looks certain to fall in the fourth quarter after a likely third quarter contraction, meaning the UK is in recession," Williamson said.

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