Latest data released by Markit/CIPS - 3 November 2021
- Composite PMI 57.8 vs 56.8 prelim
The preliminary report can be found here. That's a modest upwards revision to the initial estimate as the final readings reaffirm that the UK services sector regained back some momentum - headline reading highest in three months.
Looser international travel restrictions contributed to demand conditions with new export sales also rising at its quickest pace in just over three years.
That said, supply and capacity constraints led to a spike in inflation pressures with both operating expenses and prices charged by service providers rising at their steepest pace since the survey began in July 1996. Markit notes that:
"Looser international travel restrictions and greater domestic mobility helped to lift the UK service sector recovery out of its recent malaise in October. Business activity expanded at the fastest pace since July, driven by the first acceleration in new order growth for five months. The latest survey also pointed to the best month for export sales since June 2018.
"Tight labour market conditions persisted in October. Many consumer service providers commented on unfilled vacancies after staff departures for higher wages, despite efforts to boost pay and conditions. The impact of staff shortages was another rise in backlogs of work and greater willingness to pass on higher costs to new customers.
"Average prices charged increased at a survey-record pace, reflecting across the board pressures on operating expenses. Some 59% of the survey panel reported an increase in their average costs during October, compared with only 15% at the same time in 2020.
"Record rates of input price and output charge inflation appear to have dampened business optimism, which eased to its lowest since January. Comments from survey respondents also cited worries about prolonged staff shortages and constraints on growth due to the supply chain crisis."
