Further pain in pipeline as UK's service sector suffers biggest slide on record

Britain’s crucial service sector fared much worse that expected last month after recording the largest slump on record.

An empty Buchanan Street in Glasgow as people observe the lockdown. Picture: John Devlin

Bars, pubs, restaurants and leisure facilities have been forced to close their doors, costing thousands of jobs, and helping to suck the industry into a “black hole,” experts said, with the prosepct of worse to come.

The UK services sector scored an all-time low of 34.5 in March, according to the closely-watched IHS Markit/Chartered Institute of Procurement and Supply (Cips) purchasing managers’ index (PMI). That is sharply down from 53.2 in February with any reading below 50 denoting contraction.

Duncan Brock at Cips said: “The services sector was sucked into a black hole and flung into the unknown by the forceful impact of the Covid-19 coronavirus, affecting every area of supply chains from transport to purchasing levels and job creation.

“The abrupt drop in new orders was the sharpest since the survey began in 1996 according to the PMI data.”

He added: “The likelihood of a global recession is now a given, though its duration and severity has yet to reveal itself. One thing is for certain, with the lowest business optimism for over 20 years, the immediate outlook for the services sector is beyond grim.”

The service sector makes up about three-quarters of the economy although the PMI data does not encompass the embattled retail sector.