UK private sector output logs sharpest drop since July 2016

Xinhua News Agency | Nov 22, 2019 at 3:48 PM

LONDON, Nov. 22 (Xinhua) -- The private sector output in the United Kingdom (UK) has plummeted at its steepest rate since July 2016, according to a survey published on Friday by IHS Markit, a London-based global information provider.

The IHS Markit/CIPS "Flash UK Composite Output Index" in November was 48.5, down from 50.0 in October and below the "crucial" 50.0 no-change value.

"The overall reduction in business activity reflected modest falls in both manufacturing and service sector output," the survey said.

Chris Williamson, chief business economist at IHS Markit, said: "With an upcoming general election adding to Brexit-related uncertainty about the outlook, it's no surprise to see UK businesses reporting falling output and orders in November.

"The decline signalled by the flash PMI ("Purchasing Managers' Index") follows stagnation in October and adds to what has been the survey's worst spell since the recession of 2008-2009," Williamson said.

"The big question will be just how long can the Bank of England hold its nerve in keeping policy unchanged," added Williamson.

Duncan Brock, group director at the Chartered Institute of Procurement & Supply, said: "With the longest stretch of weak numbers for a decade, the headline figure is a sad sight to behold.

"Over the past few months, we have seen manufacturing companies oscillate between stock building and unravelling and in November, the sharpest drop in stocks of purchases since June 2018 showed inventory levels being unpicked again as another Brexit deadline passed," said Brock.