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BRIXT: UK companies are living their worst moments since the subprime crisis

2019-11-07T19:28:07.209Z



UK private sector activity continued to contract in October for the fourth month, making it the worst period for UK companies since the 2008 financial crisis, the French website BFM reported.

He attributed the office "Markit" interested in economic news of this contraction to the crisis of uncertainty of Brexit, which turned into the worst series in a decade and a half.

The Purchasing Managers' Index (derived from monthly surveys of sector companies) in all sectors such as services, construction and industry reached 49.5 last month, after improving slightly compared to September when it was at 48.8, but the result is still less than 50 points. Means a decrease in activity.

The fog has not cleared
Chuck Williamson, an economist at McKite, said there had been declines in four of the past five months, making it the worst period since 2009 in the global financial crisis.

Activity in manufacturing and construction declined, but the strong service sector - which accounts for most of the UK economy - remained stable, with the services PMI at 50 points in October, up from 49.5 in September, with It suffers from the fragile demand of international clients due to the issue of Brexit.

Economic activity declined in manufacturing and construction (Getty Images)

The UK's entire economy is hampered by the endless exit process from the EU and doubts about the form it will take, which severely affects business investment and household morale.

The atmosphere will remain cloudy for a longer time, as the date of exit from the EU has been postponed in the last days until the end of January 2020, which at least benefits - in the eyes of economic circles - to delay the risk of Brexit without an agreement.

According to Williamson, small and medium-sized companies published in October indicate a decline in GDP at the start of the fourth quarter.

Contraction of growth
Marquette previously estimated the surveys predicted a 0.1 percent drop in GDP in the third quarter, meaning the country is in recession, figures from the National Bureau of Statistics showed a 0.2 percent contraction in the second quarter.

The PMI results are not always reliable, making Williamson say official figures could show more robust growth in the third quarter.

Economist Howard Archer, who expects growth of 0.4% in the third quarter, said PMI surveys tended to be very pessimistic in times of uncertainty.

If the UK manages to escape the recession, growth throughout the whole of 2019 will continue to slow, according to a range of estimates compiled by the Treasury Department. GDP growth will reach 1.3% this year from 1.4% in 2018 and 1.9% in 2017. .

Source: aljazeera

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