The UK’s economic recovery from the coronavirus pandemic slowed in August, mainly because of staff and supply shortages, according to a new survey.
The IHS Markit/CIPS Composite Purchasing Managers’ Index (PMI) hit a six-month low of 55.3, falling from 59.2 in July. Any figure above 50 indicates growth.
Latest data a ‘stark warning’
CIPS group director Duncan Brock described August’s figure as “a stark warning”. He said the “abnormally large slowdown in overall activity” indicated that the growth levels seen earlier in summer were not sustainable.
He added: “The worst shortages of staff and materials on record are mostly to blame.”
Despite the recent easing of coronavirus restrictions, the rising number of cases of Covid-19 being recorded has put the brake on consumer spending, explained IHS Markit economist Chris Williamson: “Supplier delays have risen to a degree exceeded only once before – in the initial months of the pandemic – and the number of companies reporting that output had fallen due to staff or materials shortages has risen far above anything ever seen previously in more than 20 years of the survey’s history.”
Self-isolation impacting supply chain
James Smith, an economist at the Dutch bank ING, echoed these concerns: “The recovery has stopped in its tracks. The rise in self-isolation clearly had an effect on services spending, and the supply chain issues are having an impact on manufacturing.”