Services PMI (MoM) (U.K.)
Services Improved But Remain in Contraction
Starts Friday, January 24, 2020 at 09:30
Updated Friday, January 24, 2020
The services output used to be pretty steady during the first half of 2018, but then it entered a softening trend as the Brexit deal kept being pushed down the road. The services PMI indicator fell to 50.4 points in November which is pretty close to contraction, but it jumped higher to 51.2 points in December. In January it was expected at 51.1 points, but it fell close to contraction as this indicator came at 50.1 points. In February this sector was expected to stagnate at 50.0 points but it jumped to 51.3 points. But we saw a dive in March and this indicator declined to 48.9 points, although it returned to growth in April to 50.4 points. In May, this indicator increased to 51.0 points against 50.6 points expected. But, it turned lower again in June, falling to 50.2 points, which is pretty close to contraction. Although in July, this indicator showed some improvement as it increased to 51.4 points but it cooled off again in August to 50.5 points, missing expectations and it was expected to soften further to 50.3 points for September, but fell to 49.5 points, which means contraction. In October, the contraction deepened further, with this indicator falling to 48.6 points, which was revised to 49.3 points later and that means contraction. Although, the last revision to 50.0 points shows that services just moved above contraction. Please follow us for coverage of this event live by experienced market analysts.
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About Services PMI (MoM) (U.K.)
The U.K. Services PMI is a statistic that measures the economic situation for the U.K. services sector. It is a key representation of aggregate sales and employment levels. In comparison to the Manufacturing PMI, the Services PMI does not impact GDP positively or negatively. PMI Services is released by two private information outlets: Markit Economics and the Chartered Institute of Purchasing and Supply.It is important to note that a value of 50 is the baseline for the Services PMI. Values above 50 are a signal of expansion, while below 50 indicates a slowdown. Market participants are partial to higher values, as this is evidence of sectoral growth.In terms of volatility, the Services PMI is a secondary metric for the U.K. Although the service industry plays a large role in the U.K.’s economy, the Services PMI release does not spike volatility in the GBP to the degree of a primary metric.