United Kingdom: Services and manufacturing PMIs surge in July
July 24, 2020
The IHS Markit/CIPS UK services Purchasing Managers’ Index (PMI) rose from 47.1 in June to 56.6 in July, while the manufacturing PMI increased from 50.1 in June to 53.6 in July, driven by the easing of lockdown measures. As a result, both indices were above the 50-threshold separating worsening and improving operating conditions.
In the private sector as a whole, business sentiment and output rose, and new orders rebounded in July—particularly from domestic customers. However, employment continued to decline sharply amid higher costs, and the weak labor market could act as a brake on the economy going forward.
Commenting on the figures was Chris Williamson, chief business economist at IHS Markit: "The surge in business activity in July will fuel expectations that the economy will return to growth in the third quarter after having suffered the sharpest contraction in modern history during the second quarter. However, while the recession looks to have been brief, the scars are likely to be deep. 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.”