22nd July 2016
The UK purchasing manufacturers index slumped from 52.4 to 47.7 an 87-month low in July.
The UK Services PMI Activity Index fell to 47.4 from 52.3 in June an 88-month low and the UK Manufacturing PMI fell to 49.1 from 52.1 in June a 41-month low.
Chris Williamson, chief economist at Markit, said: “July saw a dramatic deterioration in the economy, with business activity slumping at the fastest rate since the height of the global financial crisis in early-2009.”
Zach Witton, deputy chief economist at EEF, the manufacturers’ organisation said: “The very sharp pause in activity indicates that manufacturers have reacted to the shock of the referendum result by adopting a wait-and-see approach.
“A key question is how long this will be sustained, as a failure to restart activity will have implications for their appetite for investment and recruitment, and thus have an implication for the real economy. The uncertainty surrounding the outlook for manufacturing highlights that there is potential for the Government to shore up confidence in the coming months.”
French business activity has held up better than expected in July despite concerns about Britain’s decision to leave the European Union.
The purchasing managers index for the manufacturing and service sectors rose to 50.0 from 49.6 in June, Markit said.
Chris Williams said: “In the face of the terrorist attack and the Brexit vote, to have the index coming up to 50.0 in a stable economy is perhaps a good result.”.
The French service sector rose to a better-than-expected 50.3 from 49.9 in June.
The index for manufacturing rose to 48.6 from 48.3 in June though it is still in negative territory.