TOP NEWS: UK Private Sector Growth Flat In February; Optimism Remains

(Alliance News) - The UK private sector stabilised in February, figures showed on Friday, as ...

Alliance News 21 February, 2020 | 10:01AM
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(Alliance News) - The UK private sector stabilised in February, figures showed on Friday, as supply chain disruptions were offset by growth in manufacturing.

The seasonally adjusted IHS Markit/CIPS UK composite output index was unchanged month-on-month in February at 53.3, pointing to the joint-fastest expansion of private sector output since September 2018.

Any reading below 50 indicates contraction, while one above expansion.

The latest reading signalled higher business activity and greater willingness to spend among clients. IHS Markit highlighted reduced political uncertainty following the December general election as a main driver for growth.

However, the overall rate of new order growth eased from the 19-month peak seen in January as the COVID-19 outbreak had weighed on overseas bookings and resulted in the cancellation of some orders from clients in Asia, IHS Markit said.

The seasonally adjusted IHS Markit/CIPS Flash UK manufacturing purchasing managers' index ticked up to 51.9 in February from 50.0 in January, the strongest improvement in overall business conditions since April 2019.

IHS Markit said production growth accelerated in February to the fastest for 10 months, while new work rose the fastest since March last year.

The seasonally adjusted IHS Markit/CIPS flash UK services PMI business activity index posted 53.3 in February, down from 53.9 in January, but still the second highest since September 2018.

The slowdown partly reflected weaker demand from abroad, as signalled by a renewed fall in new export orders during February.

Looking ahead, IHS Markit said optimism remained high despite "backdrop of extreme events".

"The results of trade negotiations are still unknown and now this black swan event to contend with, manufacturers and service providers will be kept on their toes, having to react and forecast outcomes as best they can," said CIPS Group Director Duncan Brock.

By Evelina Grecenko; evelinagrecenko@alliancenews.com

Copyright 2020 Alliance News Limited. All Rights Reserved.

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