Business activity in the UK stabilised in February following a collapse at the start of the year, according to a flash reading released on Friday.
The IHS/Markit CIPS flash UK composite purchasing managers’ index – which measures activity in both the manufacturing and services sectors – came in at 49.8 from 41.2 in January, hitting a two-month high.
A reading below 50.0 indicates contraction, while a reading above signals expansion.
The manufacturing PMI fell to a nine-month low of 50.5 in February from 50.7 in January, while the index for the services sector printed at a four-month high of 49.7, compared to 39.5 the month before.
Chris Williamson, chief business economist at IHS Markit, said: “The UK economy showed welcome signs of steadying in February after the severe slump seen in January, albeit with business activity remaining sharply lower than late-last year due mainly to the ongoing national lockdown.
“Although the hospitality sector, including hotels and restaurants, reported a further steep decline, as did the transport and travel sector, rates of contraction eased considerably. Business and financial services companies meanwhile recovered to register modest expansions, helping the hard-hit service sector to come close to stabilising.
“In contrast, the manufacturing sector’s performance worsened amid escalating Brexit-related export losses and supply chain disruptions. More than half of all companies reporting lower exports attributed to the decline to Brexit-related factors. Brexit was also the most commonly cited cause of supply delays.”
