UK’s private sector trade activity rose at the fastest speed in July as the ease in lockdown restrictions helped the nation in recovering. The IHS Markit flash UK composite PMI hit a 61 month high at 57.1. The all-time high level for UK composite output index is 61.8 in October 2013, and in June 2020 it was around 47.7.
Amid the worst crisis of the century, COVID pandemic, which led the inception of one of the longest contraction in the form of lockdown for three months, i.e. April, May, and June, the UK bounced back this month (July 2020) as the consumer demand and sales began to come back & started filling order books.
However, many big companies are shedding people to lower their operational cost and lighten their workload. The rate of jobless people is also rising, and the additional cost of doing business in regards to following social distancing and other health & safety concerns made many employers fire their employees.
The manufacturing industry gave an index point of 59.8 in July; however, reports suggest that while the factories increased the level of production, the output still remained below pre-march level.
Meanwhile, in Europe, the private sector business output index also reported a positive sign. The IHS Markit Eurozone Composite PMI reached around 54.8, after hitting an all-time low of 13.6 in April 2020 and 48.5 in June. The gain indicates the most substantial leap in output since June 2018 and is the first time the index reaching above the 50.00 no change level since Feb 2020.
In the UK, the production rose, but the growth in new orders in July was not impressive. The demand for products and services also remained at a low level.