UK services jump to 4-month high in June after sharp COVID-19 downturn

Source: Xinhua| 2020-07-03 20:35:25|Editor: huaxia

LONDON, July 3 (Xinhua) -- Britain's service sector bounced back to a four-month high in June after a steep downturn between April and May caused by the COVID-19 pandemic, a report jointly published by IHS MARKIT/CIPS said Friday.

The purchasing managers' index (PMI) for the service sector rose to 47.1 in June, up from 29.0 in May and record-low of 13.4 in April, albeit still under the neutral 50.0 threshold, showed the data.

"June data highlights that the worst phase of the service sector downturn has passed as more businesses start to reopen and adapt their operations to meet social distancing requirements," said Tim Moore, economics director at IHS Markit, a London-based global information provider.

Although "highly subdued demand and disruptions" related to the pandemic played a part in June, the easing of lockdown measures and reopening of the country's economy had "a favourable impact" on business activity, according to the survey.

Duncan Brock, group director at the the Chartered Institute of Procurement & Supply (CIPS), a global procurement and supply organisation, said that "though the sector remained in overall contraction territory, the re-opening of businesses premises unclogged levels of dampened demand and created hope that the worst impact of the pandemic could be over."

"However, as consumers remain fairly cautious, tightening purse strings, the highest levels of business optimism in four months may be a little premature," added Brock.

The Composite Output Index, which is a weighted average of the Manufacturing Output Index and the Services Business Activity Index, improved to 47.7 in June, up from 30.0 in May, also hitting the highest reading for four months.

"The latest Composite PMI data also showed a continued rebound in business expectations for the year ahead," said the report, adding that "manufacturers are much more optimistic about the business outlook than service providers."

According to the figures released earlier this week, the PMI for the manufacturing sector rose to 50.1 in June, up from 40.7 in May, with the reading being slightly above the neutral 50.0 mark. Enditem

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