UK economy growing again according to PMI survey
The latest PMI Survey shows the UK economy growing again in July 2020 following lockdown. Both manufacturing and services sectors showed growth in orders and business.
What are the figures?
The PMI surveys are put together by a research group called IHS Markit. These surveys are considered a respected source of research which ask 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 57.1
- Manufacturing rated as 59.8
- Services rated as 56.6
The survey issued on 24th July covers July so far.
According to the survey’s Duncan Brock of CIPS;
” …recovery in July across the manufacturing and services sectors gathered pace as the PMI figure made a sudden jump to show the fastest growth since June 2015…
Manufacturing lead the way by putting in its best output growth performance since November 2017.
With business unfettered by lockdown, optimism rose to its highest levels since September 2014 amongst manufacturers, with an injection of hope that the worst impact from the pandemic was over. The services sector painted a similar picture with the best performance in five years and a sudden improvement from last month.”
Concerns raised over jobs
So most of the companies surveyed said orders were increasing. At the same time, many also raised concerns about job levels;
” The biggest concern is that staffing levels remained disappointingly low… as furlough schemes came to an end and redundancies started to appear.”
How does this compare with other countries?
So, the UK overall figure was 57.1. How did other similar countries do?
- France 57.6
- Eurozone* 54.8
- Germany 55.5
- USA 50
- Japan 43.9
So, although the PMI survey is just that, a survey, it seems likely the UK economy is growing again and starting to recover from Covid related measures in July. From this survey it seems the UK recovery may also be stronger than other similar economies so far.
Want to learn more or see where the information came from?
Learn more about the IHS Markit PMI surveys here
Learn more about NewsBrokerUK here.
* Eurozone countries are the 19 EU countries that use the Euro currency.