The economic impact of the coronavirus pandemic is being felt by the services sector of Britain, which in March recorded a decline in activity at the fastest pace beer seen in more than the last two decades.
A joint report issued by the IHS Markit, a London-based global information provider, and the Chartered Institute of Procurement & Supply (CIPS), a British-based global procurement and supply organization, there was a plunge in the seasonally adjusted purchasing managers’ index (PMI) at 34.5 in March, compared to the 53.2 that was clocked by the index in February.
“This reading exceeded the previous record low seen at the height of the global financial crisis and signaled by far the fastest downturn in service sector output since the survey began in July 1996,” said the report published Friday.
The significantly high reduction in services activities were witnessed widely across the sector during the month of March, according to the survey data which was conducted between March 12 and March 27. The report however noted that some pockets in the technology services subcategory reported having still undergoing some business expansion.
“Technology services were the only area to signal a rise in business activity, but even this pocket of growth looks fragile as new workloads dropped more quickly in this category than at any time since 2011,” said Tim Moore, economics director at the IHS Markit.
On the other hand, there was also a drop in the Composite Output Index of the UK at 36.0 for the month of March compared to 53.0 that was clocked by it in February. The Composite Output Index is a weighted average of the Manufacturing Output Index and the Services Business Activity Index. The March number was the lowest since more than the last two decades.
Duncan Brock, group director at the CIPS, said that the forceful impact of the COVID-19 pandemic had virtually sucked the UK services sector into a black hole and had flung it into the realms of the unknown, thereby also impacting virtually every area of supply chains – ranging from transportation to purchasing levels and job creation.
“The likelihood of a global recession is now a given, though its duration and severity has yet to reveal itself. One thing is for certain, with the lowest business optimism for over 20 years, the immediate outlook for the services sector is beyond grim,” said Brock.
The commitment of the UK government to compensate 80 per cent of wages for at least three months up to 2,500 pounds (about 2,847.3 U.S. dollars) a month for the self-employed people impacted financially by the pandemic might be of some help in the times of the sharp hit to the services sector in the country. The British government has also announced a cover of 80 per cent of wages, with a limitation of 2,500 pounds, for those employees who are unable to work due to the coronavirus outbreak.
The UK government had also previously announced a support package of 330-billion-pound (about 375.9 billion dollars) for various businesses to help them ride over the crisis as far as possible.
(Adapted from XinhuaNet.com)