PMI Survey confirms UK manufacturing in recovery
The latest PMI Survey confirms the UK manufacturing sector is in recovery from the lockdown.
What are the figures and what do they mean?
The PMI surveys are put together by a research group called IHS\Markit. These surveys are considered as a respected source of research that asks companies how they are doing. For example they ask whether orders and sales are up or down. Whilst the PMI surveys are not official economic statistics, they are a useful indicator of how things might be going, and are released before the official numbers.
IHS\Markit issue an index number for each survey. If the number is 50 or higher, it means that the economy is growing. If the number is 49.9 or less, it means the economy is contracting.
Our Manufacturing sector is rated as 50.1 for June, up from 40.7 in May.
According to the survey’s Rob Duncan of IHS Markit;
“June completed a marked turnaround in momentum in UK manufacturing, as the sector switched from April’s record contraction back to stabilisation in the space of two months. Output edged higher and domestic demand firmed as lockdown restrictions loosened, factories restarted and staff returned to work. Business optimism also recovered to a 21-month high…
…The main focus is now shifting towards the labour market. Concerns are rising about the potential for marked job losses, especially once the phase out of government support schemes begins…”
So, although manufacturing is moving towards recovery, the survey also highlighted concerns many companies have about jobs and employment, with the number of manufacturing jobs falling for the fifth month in a row.
How does this compare with other countries?
We know the UK Manufacturing figure was 50.1. How did other similar countries do?
- France – 52.3
- Ireland – 51
- USA – 49.8
- Italy – 47.5
- Eurozone* – 47.4
- Germany – 45.2
- Japan – 40.1
Although the PMI survey is just that, a survey, it seems likely our manufacturing sector has started its recovery from the recent shutdowns.
Sources & Notes
* Eurozone countries are the 19 EU countries that use the Euro.