Business is booming.

UK December final services PMI 49.4 vs 49.9 prelim

Latest data released by Markit/CIPS – 6 January 2021

  • Composite PMI 50.4 vs 50.7 prelim
The preliminary report can be found here. A slight downwards revision as services activity is seen declining for a second month in a row, albeit marginally.

That said, the data here doesn’t hold much significance as Q1 economic prospects have been dampened by the latest seven-week lockdown across the UK.

Markit notes that:

“December data confirm that the UK service sector
has swung back into decline after the partial rebound
seen during the third quarter of 2020, largely reflecting
tighter restrictions on consumer services amid the
worsening trajectory of the pandemic.

“Shrinking demand resulted in additional price
discounting to stimulate sales at the end of the year.
Margins were also hit by a sharp and accelerated rise
in operating expenses, which were linked to transport
shortages and the pass through of higher freight costs
by suppliers.

“With a third national lockdown underway, service
providers will be braced for a sustained period of
subdued UK economic conditions and deferred client
spending in the first quarter of this year. However,
business optimism on a 12-month horizon was
relatively upbeat in December and reached its highest
level for almost six years, underpinned by hopes that a
successful vaccine roll-out will help to deliver a strong
economic rebound in the second half of 2021.”

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