United Kingdom: Services and manufacturing PMIs continue to recover in August
The IHS Markit/CIPS UK services Purchasing Managers’ Index (PMI) rose from 56.5 in July to 60.1 in August, while the manufacturing PMI increased from 53.3 in July to 55.3 in August, driven by the easing of lockdown measures. As a result, both indices moved further above the 50-threshold separating worsening and improving operating conditions.
While new orders rose on a recovery in demand, employment continued to decline sharply and business sentiment eased, as firms remained worried about the sustainability of the rebound.
As Tim Moore, economics director at IHS Markit, stated:
“Positive signals for the recovery of course need to be considered in the context of UK GDP shrinking by around one fifth during the second quarter of the year. Survey respondents often noted that it could take more than a year to return output to pre-pandemic levels and there were widespread concerns that the honeymoon period for growth may begin to fade through the autumn months.”