PMI Survey shows UK economy starting to recover
The latest PMI Survey shows the UK economy starting to slowly recover in June 2020. Manufacturing rose slightly, and Services fell. However, overall the economy looks like it is still contracting slightly. This is an improvement on previous months where the economy was contracting by a large amount.
What are the figures?
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.
- Overall UK economy rated as 47.6
- Manufacturing rated as 50.1
- Services rated as 47
The survey issued on 23rd June covers June so far.
According to the survey’s Duncan Brock of CIPS;
“Though the index still remained below the no-change mark in June, its rise since May was a survey record, creating another signal that some bounceback has started to emerge following April’s historic lows. This is just a beginning however as business spending remains flat and supply chains stutter into action.
Manufacturing was the strongest of the two registering above the no change mark and optimism rose to its highest levels since September 2018. Services remained weakened and still in contraction and there are deep concerns about how the end of furlough support will affect employment levels in the next few months.
In general, this is good news for the UK economy, but in terms of any significant recovery, 2020 is likely to be a write-off. The following year may see some more stability and real growth as the pandemic’s effects continue to ripple through the remainder of 2020.”
How does this compare with other countries?
So, the UK overall figure was 47.6. How did other similar countries do?
- France – 51.3
- Eurozone* – 47.5
- USA – 46.8
- Germany – 45.8
- Japan – 37.9
So, although the PMI survey is just that, a survey, it seems likely the economy shrank slightly in June although there are signs of economic recovery as well.
Sources & Notes
* Eurozone countries are the 19 EU countries that use the Euro.