PMI data points to improved picture for UK economy
The latest purchasing managers’ index (PMI) data from the UK’s manufacturing sector suggests that the country’s economy stabilised in June, according to an IHS Markit survey.
The composite PMI reading came in at 47.6 in June, up from 30.0 in May and just 13.8 in April.
PMIs are an indicator of private sector activity and are given on a scale of 1 to 100. Because anything below 50 signals a decline, the figure indicates that the UK economy contracted once again in June, although the pace slowed significantly from previous months.
IHS Markit reported figures of 47.0 figure for the services sector and a 50.1 figure for the manufacturing sector with survey respondents noting that the easing of coronavirus restrictions had a favourable impact on activity.
Chris Williamson, Chief Business Economist at IHS Markit, said: ‘June’s PMI data add to signs that the economy looks likely return to growth in the third quarter, especially given the further planned easing of the lockdown from 4th July.’
June saw a record rise in the PMI for a second successive month, confirming that the economy is moving closer to stabilising after the worst of the immediate economic impact from the COVID-19 pandemic was felt back in April.
‘Uncertainty over recovery prospects and job prospects also mean demand for many goods, especially non-essential big-ticket items, is likely to remain weak for many months, with Brexit uncertainty also continuing to cast a shadow over the economy.’
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