Factory orders bounce back as shops welcome higher footfall
SHOPPERS are returning to the high street and factory orders have picked up further after a coronavirus collapse, according to a slew of new data which suggests the economy is continuing to recover.
The proportion of businesses open to shoppers climbed from 86pc in the first two weeks of June to 92pc in the fortnight to July 12 as lockdown restrictions eased, according to the Office for National Statistics. Footfall hit a postlockdown high on July 17 at two thirds of its level a year earlier.
Firms said 7pc of workers were back from furlough and 4pc had returned from remote working in the past fortnight. However, the survey also revealed that 38pc of companies had cut back on or stopped investment to save cash as the crisis raged on.
Factory orders rose to their highest level since March, according to the Confederation of British Industry, although economists had pencilled in a bigger recovery.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the
CBI survey was likely understating the pace of the manufacturing recovery as its questions did not distinguish between a slight uptick in each company’s business and a major bounce.
Given order book backlogs from the lockdown, Mr Tombs said manufacturing output was likely to be just 5pc below its pre-Covid level in July, with GDP down 12pc from where it was in January. However, a leading Bank of England rate-setter warned yesterday that the recovery risked “getting stuck” as the “fear factor” from rising infections and job losses destroyed demand.
Jonathan Haskel, a member of the Monetary Policy Committee, raised concerns that “cautious consumers, worried about unemployment and health risks, will hold back the recovery”. Mr Haskel has become the latest rate-setter to enter the debate on the strength of the economy’s recovery.
Andy Haldane, the Bank’s chief economist, has insisted the economy is undergoing a V-shaped recovery, arguing that it is growing at 1pc a week.
However, many of his colleagues on the MPC and City economists have been much more gloomy on the country’s outlook.