(Alliance News) - The UK service sector neared stabilisation in February after a disappointing start to the year, figures from IHS Markit showed on Wednesday.
The IHS Markit-Chartered Institute of Procurement & Supply services purchasing manager's index for February registered 49.5, up 10 points from 39.5 in January. The reading, remaining below the no-change mark of 50.0, signalled that the economy continued to contract in February but at a far more moderate pace than January's decline.
"The headline index has posted below the crucial 50.0 no-change mark in each month since November 2020, but the latest reading signalled the slowest decline in service sector output over this period," IHS Markit highlighted.
The survey data was collected between February 11 and 24.
New business volumes fell only slightly during February, while job cuts were only marginal. Survey respondents cited Brexit-related difficulties as a factor holding back sales to customers in the EU.
Expectations over the year ahead improved, with optimism around vaccine rollouts leading to the highest level of confidence amongst firms since the end of 2006.
"UK service sector activity was relatively stable in February and so it appears that the third national lockdown has seen limited spillovers to parts of the economy beyond the scope of government mandated closures," said Tim Moore, economics director at IHS Markit.
Together with Monday's manufacturing PMI - which rose to 55.1 points in February from 54.1 in January - the UK's composite output index for February rose to 49.6, just below neutral, from January's 41.2.
By Lucy Heming; lucyheming@alliancenews.com
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