The Courier & Advertiser (Perth and Perthshire Edition)
UK economy has ‘mountain to climb’
Experts have warned the UK has a mountain to climb even as new figures show large parts of the private sector have returned to growth as the country recovers from the worst of lockdown.
Flash PMI figures have hit 57.1 so far in July, up sharply from 47.7 last month.
The number comes from the closely watched Purchasing Managers’ Index (PMI), which is compiled every month by IHS Markit and the Chartered Institute of Procurement & Supply (CIPS).
They are a preview of the final figures, which are due in early August.
It makes July the third month in a row that the PMI score has improved from an all-time low of 13.8 in April, and is the fastest expansion since June 2015.
But IHS Markit’s Chris Williamson sounded a note of caution.
“While the recession looks to have been brief, the scars are likely to be deep,” he said.
“Even with the July rebound there’s a long way to go before the output lost to the pandemic is regained and, while businesses grew more optimistic about the year ahead, a V-shaped recovery is by no means assured.
Many companies are still experiencing low demand and are cutting jobs, which in turn could drive down demand further as households tighten their belts.
Mr Williamson said: “July’s PMI represents a step in the right direction but there is a mountain still to climb before a sustainable recovery is in sight.”
The manufacturing sector scored 53.6 in July compared to 50.1 in June. It is the sector’s highest point on the index since March last year.
The UK’s vital services sector meanwhile rose from 47.1 last month to 56.6 in July – the fastest expansion in half a decade.
Meanwhile new figures from the Office for National Statistics (ONS) showed retailers saw a major boost in sales last month as spending rapidly rebounded after the coronavirus shutdown.
Sales volumes jumped by 13.9% in June compared with the month before.
It brings total sales across Britain close to the levels they were at this time last year, after two months of doubledigit growth.
Online spending as a proportion of overall spending dropped to 31.8% in June from 33.3% in May – an all-time record. However, it is still well above the 20% reported in February this year.