Retail sales surge as manufacturers add to hopes of swift recovery
RETAIL sales surged to pre-pandemic levels as shoppers barrelled out of lockdown in June, amid signs of a return to rapid manufacturing and services growth this month. Sales volumes jumped by 13.9pc compared with May, the Office for National Statistics said, raising hopes of a speedy “V-shaped” recovery.
Meanwhile, a closely watched survey by data firm IHS Markit showed private sector businesses enjoyed their fastest growth for five years in July. Retail sales volumes at non-food stores jumped by almost half in June, the ONS found, partly driven by customers at non-essential shops when they were allowed to open from the middle of the month. Fuel sales picked up by more than a fifth.
Both, however, are still down on prepandemic sales levels. Grocers and online shops performed better still, with food sales up 5.3pc from pre-coronavirus levels as spending switched from cafés, pubs and restaurants to supermarkets. Total retail sales were 1.3pc lower than last June, a recovery from April’s year-on-year fall of 22.7pc.
Business activity across the services and manufacturing industries also rebounded in July, IHS Markit’s purchasing managers’ index showed. The survey climbed to 57.1 – its highest level since 2015. It is above 50 for the first time since February, indicating growth. Expectations for future output jumped to a sixyear high among manufacturers, although rising optimism in the services industry was tempered by concerns over social distancing. Businesses still have some way to go to fill the hole left by record falls in output during lockdown. Goldman Sachs economists estimate the economy is 8.5pc smaller than it was before the pandemic, while more than half a million businesses are now in significant financial distress, according to insolvency practitioners Begbies Traynor.