The UK economy “lost some of its bounce” in September, with the initial rebound from Covid-19 lockdowns showing signs of fading, according to a new business survey.
The IHS Markit/CIPS flash composite Purchasing Managers’ Index (PMI), which measures how the private sector is doing, fell to a three-month low of 55.7 in September after jumping to 59.1 in August. However, a score above 50 still indicates growth.
This month’s slowdown was especially acute in services, particularly in the restaurant sector with the end of the Eat Out to Help Out scheme, said Chris Williamson, chief business economist at IHS Markit.
“Demand for other consumer-facing services also stalled as companies struggled amid new measures introduced to fight rising infection rates and consumers often remained reluctant to spend,” Williamson added.
Duncan Brock, group director at CIPS, the Chartered Institute of Procurement & Supply, said that Covid-19 restrictions were continuing to “suffocate” the UK economy, wiping out some of the recent gains in the manufacturing and services sectors. Meanwhile, supply chains were still facing bouts of instability with stock shortages and longer delivery times.
He concluded: “With the weakest overall optimism since May when the recovery started, the fragility of the economic recovery has been revealed.”
Lockdown restrictions introduced at the end of March led to the UK’s GDP shrinking by a record 20.4% in the second quarter of 2020, following a 2.2% decline in the first quarter of the year.