By Ian McConnell
THE UK private-sector economy contracted for a third consecutive month in October and is enduring its toughest spell since early-2009, while job losses are among the “fiercest” in a decade, a senior economist has declared.
Chris Williamson, chief business economist at IHS Markit, was commenting after a survey from the Chartered Institute of Procurement and Supply showed that UK services sector output stagnated in October, having declined during the previous month.
READ MORE: Ian McConnell: East Renfrewshire Tory MP ignores Brexit economics to point at SNP
CIPS’s business activity index for services edged up to the 50 no-change mark last month, from 49.5 in September, on a seasonally adjusted basis.
However, the sector’s new business intake fell at the fastest pace since April. And new export business tumbled at a rate close to September’s near-record pace. The services sector cut employment in October – the fifth month so far this year in which workforce numbers have declined.
READ MORE: Ian McConnell: Boris Johnson acts the goat on Brexit as the grim cost keeps on rising
CIPS said: “Companies continued to link lower new work to uncertainty surrounding Brexit. Uncertainty around Brexit also undermined international demand for UK-based services.”
Other surveys published this month by CIPS, compiled by IHS Markit, showed declines in manufacturing and construction activity in October.
The IHS Markit/ CIPS all-sector purchasing managers’ index, a composite measure of changes in activity in the manufacturing, construction and services sectors, edged up from 48.8 in September to 49.5 last month on a seasonally adjusted basis. While signalling a slight slowing in the rate of decline, it remained below the level of 50 deemed to separate expansion from contraction to signal a third consecutive monthly fall in UK private-sector activity.
READ MORE: Ian McConnell: Paris metro poster for slapstick British farce evokes Brexit metaphor
Mr Williamson said the October reading was historically consistent with gross domestic product declining at a quarterly rate of 0.1 per cent.
Commenting on the employment picture, Mr Williamson said: “The lack of new order inflows and uncertainty about the outlook also continued to dampen firms’ appetite to take on staff. Employment fell overall in October, with the rate of job losses easing only slightly on September to remain one of the fiercest since 2009. Net job losses were recorded in all three sectors for the second month running.”
On a more positive note, he observed that survey responses later in October, after the threat of a no-deal Brexit had receded, were generally stronger than those earlier in the month.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here