UK services sector suffers worst decline on record in March
The UK services sector suffered its worst decline on record in March as the coronavirus outbreak took its toll, according to a survey released on Friday.
The IHS Markit/CIPS final UK services purchasing managers’ index printed at 34.5, coming in below the flash estimate of 35.7 and down sharply from 53.2 in February. This marked the fastest decline in activity since the survey began in July 1996.
A reading below 50 indicates contraction, while a reading above signals expansion. The latest survey data were collected between 12 and 27 March.
Reductions in activity were broad-based across the sector, with only the technology services subcategory recording pockets of continued business expansion, the survey found.
Tim Moore, economics director at IHS Markit, said: "A record slump in UK service sector activity reported in March adds to the increasingly bleak economic statistics seen recently across the developed world.
"Emergency public health measures to combat the Covid-19 pandemic continue to mothball business operations, force aggressive cutbacks on non-essential expenses and trigger distress for household finances.
"The severe impact on service sector activity in March was by no means limited to consumer-facing businesses or those directly hit by international travel restrictions."
Andrew Wishart, UK economist at Capital Economics, said the downward revision to March’s PMIs confirms that the measures taken to slow the spread of the coronavirus have pushed the economy into a recession of "unprecedented scale and depth".