Economic Buzz: UK Services Sector Continue Downturn In November

5 Dec 2022 , 03:52 PM

The UK service sector registered another modest contraction of activity during November as levels of incoming new work continued to fall amid ongoing economic uncertainty and cost of living challenges weighing on discretionary spending. Cost pressures showed little signs of abating, with operating expenses again rising sharply, although pricing power was limited to some degree by rising competition and falling sales. The headline seasonally adjusted S&P Global / CIPS UK Services PMI Business Activity Index recorded 48.8 in November. Firms once again linked the decline to a concurrent reduction in new sales volumes, amid reports of ongoing caution amongst businesses and belt-tightening amongst households in the face of continued cost of living challenges. Overall, sales were down for a third month in a row, and to the sharpest degree since January 2021s lockdown-induced reduction. Budgets were reported to be under pressure at both domestic and foreign clients. Indeed, new export business was also down for the third successive survey period, albeit only marginally as a weak pound helped support trade with the USA. Novembers seasonally adjusted S&P Global / CIPS UK Composite PMI was unchanged at 48.2 to thereby signal a fourth successive monthly fall in private sector output. Service sector business activity continued to fall modestly, whilst manufacturing output fell at a slightly faster, and thereby, elevated pace. Incoming new business volumes remained mired in contraction territory, declining at the fastest rate r for 22 months. Firms were broadly able to keep on top of their workloads, in part supported by another modest increase in staffing levels. Jobs growth was, however, exclusively seen in the services industries: manufacturing employment was cut for a second successive month in November. Powered by Commodity Insights