30 year high for UK manufacturing growth
The IHS Markit/CIPS Manufacturing Purchasing Managers Index (PMI) achieved a high of 65.6 in May, an increase of 7.7% on 60.9 in April. A figure above 50 represents growth and the latest reading of 65.6 is the highest since records began in 1992. Whilst we saw an increase in growth, the report also warns that a large number of suppliers are struggling to meet demand which in turn has led to average delivery times increasing; resulting in the highest rise in the cost of supplies since the survey’s inception. As a result of this, the market has thus seen manufacturers increasing their own prices. Of course, the easing of restrictions has largely fuelled this growth and this is highlighted globally by a record rise in new export business. Positive news for the manufacturing sector and more encouraging signs of recovery as we emerge from a difficult 18 months.
Thriving construction sector squeezed by cost pressures
Output for the construction sector is rising at its fastest rate in 7 years with the latest IHS Markit/CIPS UK Construction PMI index rising to 64.2, increasing from 61.6 in May. Encouragingly, this is against the backdrop of significant challenges with materials availability, and construction firms remain confident about their own short term growth prospects. KPMG’s UK head of infrastructure, building and construction, Jan Crosby, feels the growth spurt in part reflects surging house prices, stating; “With the stamp duty holiday ending soon, house prices remain high, which means the pressure is on to build more residential projects and new housing developments, and the sector is more than responding.”
UK Service exports contract by £110bn as a result of Brexit
Between 2016 – 2019, UK service exports shrunk by more than £110bn as a result of Brexit, according to research carried out by Aston University. The research was carried out by comparing projections on how industries including finance & business services and IT would have grown had they continued their previous paths with actual growth stats since the 2016 vote. Whilst there are many encouraging stories as we continue to emerge from the damage caused by the global Pandemic, it’s important to remain vigilant and be aware of the negatives still at play.
UK Employment boom predicted
An employment ‘boom’ is predicted for the UK, as per the latest research from Manpower UK. The job outlook for the UK is at a 6 year high according to the staffing agency, the strongest growth of any European country bar Ireland. Sectors such as hospitality, retail, finance and business services are showing strong hiring intentions and employers are resorting to increasing pay offers to attract staff. The latest growth figures represent the biggest quarter on quarter increase in nearly 20 years and the largest year to year increase since records began. It should be mentioned however that much of this increase is likely to be due to companies offsetting against redundancies and employment freezes that have been in place over the past year. Again though, it’s fantastic to see and more evidence of a stronger recovery than some had predicted.
UK now back to pre-pandemic levels, according to BOE’s chief economist
Andy Haldane, the Bank of England’s chief economist, this month told a podcast by Money Week that the UK economy has indeed now fully recovered from the Covid 19 Pandemic. A bullish outlook indeed from Mr Haldane, given the UK’s economy was plunged into the worst recession for 300 years. A look at the official figures shows the economy still being 3.7% down on February 2020 however Mr Haldane is confident May’s figures will provide a boost given the easing of lockdown restrictions. He went on to say “That will mean as of now I reckon we’ve pretty much made up all of the GDP lost ground from last year, and we’re back roughly to around pre-covid levels on the back of what is a really very punchy recovery.” He did however go on to warn of building price pressures which could lead to a “nasty surprise” if the bank decides to go with a sharper than expected base rate increase. Bold predictions from Mr Haldane here, and for many this will come as a surprise given the challenges that still remain.
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*Sources: Sky News, City AM, Gov.uk, NACFB, KPMG, Manpower UK