The PMI indices of U.K. continued their rebound from the April lows in August with the manufacturing and services readings recording marked monthly rises. The services PMI rose to a six-year high of 60.1 from 56.6 seen in July. Meanwhile, the manufacturing PMI rose to 55.3 from July’s 53.3, driving an overall rise in the composite PMI to 60.3.
The latest outturns signify that all three of the PMIs at present well above the key-50 mark. Positively, respondents to the August surveys underlined the continued easing in lockdown restrictions and the measures announced by the Chancellor – especially throughout the leisure categories and hotels and restaurants – as key factors behind the future rebound in activity this month.
Throughout the services sector, this was especially clear in the new business measures, which rose to 59.3, from 54.3 previously, hinting at the most rapid pace of rise in well over five years. A solid rebound was also seen throughout the manufacturing sector, where the new orders balance rose to 59.4, mainly because of a resurgence in domestic order flows.
“While these outturns suggest the near-term outlook is consistent with UK economy continuing to recover, from the sharp declines in activity seen across March and April, other parts of the August surveys suggest there remains significant concern over the durability of the recovery”, noted Lloyds Bank in a research report.
Markedly, in spite of solid rebounds in current activity and new orders, the employment balances moved further below the 50-mark, in line with further reductions in headcount. In the meantime, business expectations for the year ahead eased back in August, with a number of survey respondents clearly citing concerns over the durability of the recovery.
