Fac­tory or­ders bounce back as shops wel­come higher foot­fall

The Daily Telegraph - Business - - Business - By Lizzy Bur­den and Tom Rees

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.

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