UK Demand for Goods and Services Grows at the Fastest Rate Since the 1990s | Retail business
The UK economy recorded its strongest growth in business activity in more than two decades in May, as buyers rushed to Main Street and the lifting of lockdowns accelerated Britain’s economic recovery.
The rebound in the manufacturing and service sectors follows a return to pre-pandemic retail sales levels in April, figures showed Friday.
The IHS Markit Flash Purchasing Managers (PMI) Index – a closely watched barometer of economic activity – found that hotels, restaurants and other consumer services saw the biggest increase in demand this past year. this month, although improvements were reported across all sectors, leading to the fastest growth since the composite PMI began in 1998.
Chris Williamson, chief business economist at IHS Markit, said the UK was experiencing an ‘unprecedented growth spurt’ as the economy reopened, which was highlighted by the survey also reporting ‘a record level of business confidence. The PMI for May was 62, down from 60.7 the month before, with any number above 50 showing economic growth.
“Factory orders are growing at a record pace as global demand for goods continues to recover, and the service sector is experiencing near-record growth as the economy opens up allows more companies to trade.” .
“Business confidence has meanwhile reached an all-time high as concerns about the impact of the pandemic continue to fade,” he said.
According to PMI, consultancy firm Capital Economics said there was a sting in the tail for manufacturers, however, after delays in imports following a messy Brexit and the spread of Covid-19 across the world extended delivery times for raw materials and key components, according to PMI. index.
Markit said: “Serious delays continued in global supply chains in May, as evidenced by a marked increase in supplier delivery times. Producers of goods responded by building up purchasing stocks for the first time in 2021. “
The surge in transportation bills that followed a rise in diesel prices in April and May, coupled with an increase in the price of copper and other metals, led to the fastest increase in overall purchasing costs since March. the index started in January 1992, added Markit.
The report followed official figures showing Britons flocked to stores in April to stock up on clothing and footwear, pushing retail sales up 9.2% in the month.
With all non-essential retailers allowed to reopen from April 12 in England and Wales and from April 26 in Scotland, after closing for almost four months, clothing and footwear stores saw an increase of their sales by almost 70% from March levels.
The Office for National Statistics said the sales boom across all sectors of the retail industry meant the volume of goods purchased in April was 10.6% higher than in February 2020, before the impact of the Covid-19 pandemic.
Housewares, which turned out to be in high demand over the past year as people looked to improve their homes, grew more modestly, but the continuity of online sales kept volumes close to 20% higher. higher than in February 2020.
Increased sales at brick and mortar stores will encourage high street retailers but comes too late for Debenhams, which closed last weekend, and a host of other retailers that have gone bankrupt or downsized their number of stores in the last year.
Online sales fell across most sectors in April as people chose to visit the newly reopened stores, but continue to account for around a third of all sales after a surge in activity during the pandemic.
Aled Patchett, Head of Retail and Consumer Goods at Lloyds Banking Group, said: “April was always likely to see a further increase in sales as stores reopened for the first time in months. – fashion retailers being the ultimate beneficiaries of the reopening of the outdoor gardens and the six night return rule.
“The high street will be hopeful that the re-emergence of domestic hospitality this week will continue to bring buyers back in force to accelerate its recovery this summer.”
However, he warned that the presence of new variants of Covid could push shoppers to rekindle online habits that have become dominant in the past 12 months.