Britain's private sector activity continues to fall in December

Source: Xinhua | 2019-12-17

The private sector output in the United Kingdom (UK) continued to decline in December, led by the fastest drop in manufacturing output since 2012, according to a survey published on Monday by IHS Markit, a London-based global information provider.

The IHS Markit/CIPS "Flash UK Composite Output Index" in December was 48.5, down from 49.3 in November and below the "crucial" 50.0 no-change mark.

Figures showed that service sector output dropped slightly in December, with service Purchasing Managers' Index (PMI) standing at 49.0, down from 49.3 in November, below the 50.0 no-change level for the second month running.

Meanwhile, Manufacturing PMI dropped to 47.4 in December from 48.9 in November, the sharpest downturn since August 2019.

The survey cited faster reductions in manufacturing output and new orders as the main dragging contributors.

According to the survey, the latest fall in production volumes was the steepest since July 2012 and incoming new work has decreased in each month since May.

Chris Williamson, chief business economist at IHS Markit, said: "December's PMI survey data sadly lacked festive cheer, indicating that the economy contracted for the third time in the past four months."

"The latest decline was the second largest recorded over the past decade, and increases the likelihood that the economy contracted slightly in the fourth quarter as Brexit-related uncertainty intensified in the lead up to the general election," Williamson added.

Duncan Brock, group director at the Chartered Institute of Procurement & Supply, said: "The continuing Brexit-related aversion to investment and a pre-election lack of consumer confidence led to the fastest fall in business activity in December since July 2016."

"European orders continued to dry up along with new jobs as the addition of a slowing global economy made trading conditions all the more challenging for both sectors," Brock said.

He believed that the Brexit path is still littered with obstacles and the need for strong negotiation skills for a future EU agreement would be paramount to avoid this downward slide becoming the economic landscape for an extended period.