• Privacy policy
  • T&C’s
  • About Us
    • FAQ
  • Contact us
  • Guest Content
  • TLE
  • News
  • Politics
  • Opinion
    • Elevenses
  • Business
  • Food
  • Travel
  • Property
  • JOBS
  • All
    • All Entertainment
    • Film
    • Sport
    • Tech/Auto
    • Lifestyle
    • Lottery Results
      • Lotto
      • Set For Life
      • Thunderball
      • EuroMillions
No Result
View All Result
The London Economic
SUPPORT THE LONDON ECONOMIC
NEWSLETTER
The London Economic
No Result
View All Result
Home Business and Economics

Economy set for deepest downturn in living memory as service sector plummets

A closely watched survey of the sector fell to a record low for the second month running in April.

Jack Peat by Jack Peat
2020-05-05 10:35
in Business and Economics
Photo by Kaique Rocha from Pexels

Photo: Kaique Rocha

FacebookTwitterLinkedinEmailWhatsapp

The UK’s economy is on course for a downturn deeper than anything seen in living memory, experts warned on Tuesday, as the service sector plummeted to a new record low.

The closely watched IHS Markit/CIPS purchasing managers’ index (PMI) for services dropped to 13.4 in April, by far the worst score since the survey started in 1996.

“April’s PMI data highlights that the downturn in the UK economy during the second quarter of 2020 will be far deeper and more widespread than anything seen in living memory,” said Tim Moore, economics director at IHS Markit, which compiles the survey.

Even a doomsday prediction may be optimistic

He said the score is consistent with a quarterly 7 per cent drop in the economy, but even such a doomsday prediction may be optimistic.

“We expect the actual decline in GDP could be even greater, in part because the PMI excludes the vast majority of the self-employed and the retail sector,” Mr Moore added.

The economy had already been smarting in March, when the survey returned a then record low of 34.5. Anything below 50 is considered a contraction in the sector.

The previous record low was 40.1 in November 2008.

Some firms say their business has totally stopped

In April, the survey found that only one in five services companies managed to avoid a drop in activity when compared with March. Some firms, hit by total closures, said their business had totally stopped.

Duncan Brock, group director at the Chartered Institute of Procurement & Supply (CIPS), said: “Though a further downturn was anticipated after last month’s historically low figures, the scale of this fall is unnerving.

RelatedPosts

Trump unveils $499 gold mobile phones for ‘real Americans’

No ‘millionaire exodus’ as a result of Labour policies, study finds

Shops could be forced to accept cash in future

Liverpool to introduce tourist tax from June

“A significant number of businesses in shutdown now may never reopen. Even with some movement in the lifting of restrictions on business activity, the UK economy is not a tap that can just be turned on.”

Some shoots of good news

Amid the carnage, there were some shoots of good news.

One in seven companies said their activity had been unchanged since March, largely thanks to continuity plans such as working from home.

There were also signs of hope that the economy could start opening up again.

“Survey respondents indicated a tentative upturn in their business expectations amid hopes that a gradual reopening of the economy can be achieved in the summer,” Mr Moore said.

Ayush Ansal, chief investment officer at hedge fund Crimson Black Capital, said: “November 2008 was a minor economic blip compared to April’s abyss.

“That business expectations have picked up slightly is more a reflection of our recalibration to chaos than hopes of an imminent rebound.

“The services sector has been shattered and the road to recovery will take many, many years.”

Related: April business figures outline grim reality of the coronavirus crisis

Subscribe to our Newsletter

View our  Privacy Policy and Terms & Conditions

About Us

TheLondonEconomic.com – Open, accessible and accountable news, sport, culture and lifestyle.

Read more

SUPPORT

We do not charge or put articles behind a paywall. If you can, please show your appreciation for our free content by donating whatever you think is fair to help keep TLE growing and support real, independent, investigative journalism.

DONATE & SUPPORT

Contact

Editorial enquiries, please contact: [email protected]

Commercial enquiries, please contact: [email protected]

Address

The London Economic Newspaper Limited t/a TLE
Company number 09221879
International House,
24 Holborn Viaduct,
London EC1A 2BN,
United Kingdom

© The London Economic Newspaper Limited t/a TLE thelondoneconomic.com - All Rights Reserved. Privacy

No Result
View All Result
  • Home
  • News
  • Politics
  • Lottery Results
    • Lotto
    • Set For Life
    • Thunderball
    • EuroMillions
  • Business
  • Sport
  • Entertainment
  • Lifestyle
  • Food
  • Travel
  • JOBS
  • More…
    • Elevenses
    • Opinion
    • Property
    • Tech & Auto
  • About Us
    • Privacy policy
  • Contact us

© The London Economic Newspaper Limited t/a TLE thelondoneconomic.com - All Rights Reserved. Privacy

← Populism’s usefulness has expired, it’s time to move on ← Care home deaths increase by more than 2,500 in one week – ONS
No Result
View All Result
  • Home
  • News
  • Politics
  • Lottery Results
    • Lotto
    • Set For Life
    • Thunderball
    • EuroMillions
  • Business
  • Sport
  • Entertainment
  • Lifestyle
  • Food
  • Travel
  • JOBS
  • More…
    • Elevenses
    • Opinion
    • Property
    • Tech & Auto
  • About Us
    • Privacy policy
  • Contact us

© The London Economic Newspaper Limited t/a TLE thelondoneconomic.com - All Rights Reserved. Privacy

-->