United Kingdom: Composite PMI records worst reading since February in August
August 23, 2021
The IHS Markit Composite Purchasing Managers’ Index (PMI) fell to 55.3 in August from July's 59.2, held back by staff and supply shortages amid a surge in Covid-19 cases which saw many people forced to self-isolate. August's result marked the weakest reading since February. As such, the index remained entrenched above the 50-threshold, signaling a softer improvement in business conditions from the previous month.
The headline print reflected a deterioration in both the Services PMI and the Manufacturing PMI. Output growth eased in both sectors, although employment growth in the services sector accelerated to a record pace amid improved business confidence.
On the implications of August’s reading, Chris Williamson, chief business economist at IHS Markit, commented:
"Although the PMI indicates that the economy continues to expand at a pace slightly above the pre-pandemic average, there are clear signs of the recovery losing momentum in the third quarter after a buoyant second quarter. Despite Covid-19 containment measures easing to the lowest since the pandemic began, rising virus case numbers are deterring many forms of spending, notably by consumers, and have hit growth via worsening staff and supply shortages. Supplier delays have risen to a degree exceeded only once before—in the initial months of the pandemic.”