Latest data released by Markit/CIPS - 3 March 2021
- Composite PMI 49.6 vs 49.8 prelim
The preliminary report can be found here. Minor revisions but this reaffirms that the UK services sector declined at a much slower pace in February as compared to the drop in January, underscoring some degree of stabilisation.
Business confidence remains high amid the vaccine rollout progress although high input price inflation is something to take note of - a consistent trend across Europe.
Markit notes that:
"UK service sector activity was relatively stable in February and so it appears that the third national lockdown has seen limited spillovers to parts of the economy beyond the scope of government mandated closures. While customer-facing businesses continued to report severe constraints on activity due to the pandemic, there were signs of growth in technology and some business services after a disappointing start to 2021.
"Tighter restrictions on international travel meant that export sales remained an area of weakness for the service economy. Survey respondents cited regulatory issues and supply disruption as factors holding back new business wins from EU customers, which more than offset the positive impact on overseas demand from the economic recovery in the US and Asia-Pacific.
"Higher fuel bills and shipping costs pushed up operating expenses in February. Service providers have mostly absorbed pressure on margins from rising input costs over the past 12 months, but their latest increase in average charges was the fastest since the start of the pandemic. This often reflected additional charges due to greater transport costs and there were some reports that pent up domestic consumer demand had improved opportunities to raise prices for forward-bookings."