UK November final services PMI 47.6 vs 45.8 prelim

Latest data released by Markit/CIPS – 3 December 2020

The drop in services output is the first since June but there is a positive, as business optimism reaches its highest level since February (and this is even before accounting for the vaccine news yesterday). Markit notes that:

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“New lockdown measures and tighter pandemic restrictions
unsurprisingly tipped UK private sector output back into
decline during November. However, the collateral damage
on areas outside of hospitality, leisure and travel has been
far more modest than in the first lockdown period. Back in
April, nearly 80% of all service providers reported a monthly
drop in business activity, while the equivalent figure was
only 30% in November.

“The final Services PMI reading is also almost two points
higher than the earlier ‘flash’ estimate of 45.8, highlighting
that the speed of the downturn was not as steep as
suggested by the early responses to the survey in November.
Overall service sector output was still severely impacted
by widespread business closures among consumer-facing
service providers, but other types of firms often commented
on successfully adapting to the new lockdown restrictions
and seeing a reduced impact on client spending than
initially expected.

“Hopes that the pandemic will be brought under control
from an effective vaccine resulted in a sharp improvement
in business optimism during November. Across the UK
private sector as a whole, confidence about the year ahead
outlook reached its highest since March 2015. That said,
survey respondents also cited rising business uncertainty in
the short-term, largely due to ongoing restrictions on trade,
which contributed to another round of job cuts and efforts to
rein in discretionary spending during November.”