Leading economic information provider IHS Markit has concluded that Britain is on course for a 7% quarterly economic contraction.
IHS Markit’s economics director Tim Moore warned the UK over the extent of its economic regression.
In the second quarter of this year, the fall in output “will be the worst in living memory”, he said.
PMI Index Low Point
IHS Markit’s monthly service sector Purchasing Manager’s Index (PMI) fell to its lowest point since it began in 1998.
The survey dropped significantly to 13.4 in April from 34.5 in March.
An amalgamated PMI survey combining the service and manufacturing sectors, revealed desperately worrying economic news.
The two sectors fell to 13.8 from 36 in March.
Any score above or below 50 denotes whether an industry is growing or declining.
Purchasing managers can see what is happening to a company’s orders.
And are the first in line to realize that activity is falling away in an industry.
Growth Fall Could Be Worse
The April reading of the services survey is consistent with a 7% fall in growth.
But there may be an even worse outcome.
As the service sector analysis does not include retail businesses, or the self employed.
Overall UK growth has been gradually fallen since the 2016 referendum result to leave the European Union.
The recent nadir was a growth reduction of -0.2% in the second quarter of last year.
In the aftermath of the financial crash of 2008, economic expansion descended to just below the -2% mark.
Yet if IHS Markit proven to be correct, the economic fallout from coronavirus will be much worse.