By Ian McConnell
THE UK private-sector economy has grown this month at the fastest rate for five years with the easing of lockdown measures implemented to slow the spread of coronavirus having boosted manufacturing and services activity, but job cuts have accelerated.
The flash composite output index, published yesterday by the Chartered Institute of Procurement and Supply and IHS Markit, has risen to a 61-month high of 57.1 this month on a seasonally adjusted basis. The final reading for June was 47.7.
The 50 mark is deemed to separate expansion from contraction, with the latest reading for the composite output index the first to be in expansionary territory since February.
For the UK manufacturing sector, the flash output index has climbed to a 32-month high of 59.8 this month. The final reading for June was 50.7.
The flash UK services business activity index has risen to a 60-month high of 56.6 this month, from 47.1 in June.
Highlighting job losses, CIPS and IHS Markit said: “Employment numbers continued to fall sharply, with the rate of job-shedding accelerating since the previous month. Lower staffing levels were typically linked to redundancies in response to subdued workloads and higher operating costs.”
Chris Williamson, chief business economist at IHS Markit, said: “The UK economy started the third quarter on a strong footing as business continued to reopen doors after the Covid-19 lockdown. 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.”
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereLast Updated:
Report this comment Cancel