Business output jumped significantly in June but optimism remains as low as it was during the credit crunch
- Services and manufacturing output jumped by over 10 points each last month
- Today, nail bars, massage studios, and beauty salons were allowed to reopen
- On June 15, non-essential stores were allowed to reopen by the government
Output across the UK’s services and manufacturing sectors grew last month but optimism remained below its nadir during the global financial crisis, new figures reveal.
Business output rose from 55.3 in May to 66.5 in June, according to the monthly BDO Output Index, which measures output growth in the economy by weighting data from the UK’s leading business surveys.
A reading of at least 95 indicates growth and last month’s figure is considerably below that and the June 2019 value of 97.24. However, it is a big improvement from April, when the index was a meagre 44.9.
Output from the services sector, which forms around four-fifths of the British economy, rose by 11.2 points to 64.73 in June, which was the industry’s largest recorded monthly rise
The BDO output indices have bounced back strongly from their coronavirus lockdown lows
But the Optimism Index remained below its credit crunch levels, despite rising for the second consecutive month. It was 79.59 in June compared with 79.64 in 2008/09.
Services and manufacturing output jumping by more than 10 points each, as more businesses were allowed to reopen by the government.
Output from the services sector, which forms around four-fifths of the British economy, increased by 11.2 points to 64.73 in June, which was the industry’s largest recorded monthly rise.
Manufacturing did not grow as strongly as services; nonetheless, it still rose by 10.92 points and remains at a higher number than services at 80.47.
Kaley Crossthwaite, a BDO partner, remarked: ‘Although economic activity remains considerably suppressed, the recovery in output is an encouraging signal that the easing of restrictions has breathed life into certain sectors.
‘While output continues to show positive momentum, the crucial infrastructure underpinning the economy remains fragile. As government support measures are rolled back in the coming months, the prospects for the economy will become clearer. For now at least, there is reason for some very cautious optimism.’
The manufacturing optimism index has bounced back but remains at a very low level
The services optimism index has also seen a bounce and is broadly level with manufacturing
Today, nail bars, massage studios, and beauty salons were finally allowed to reopen as well, though with strict limits on what services that its industry can provide
On June 15, non-essential stores were allowed to reopen by the government after being closed since late March to try and stop the spread of the coronavirus.
At the beginning of the month, car showrooms and outdoor markets were allowed to resume trading. But from the middle of June, business including fashion stores, gift shops, food retailers and hardware stores could reopen their doors to customers.
Pubs, bars and restaurants remained shut until July 4 though, except for takeaway meals.
Today, nail bars, massage studios, and beauty salons were finally allowed to reopen as well, though with strict limits on what services that its industry can provide.
On June 15, non-essential stores were allowed to reopen by the government after being closed since late March to try and stop the spread of the coronavirus
‘It’s important to note that beauty professionals will not be able to offer therapies and treatments that involve working on the face,’ the National Health and Beauty Federation states.
‘These restrictions will be in place due to the requirement to avoid working in the ‘high-risk zone’ which is the area directly in front of a client’s eyes, nose and mouth.’
Retailers have implemented strict hygiene measures to try and keep customers safe such as limits on customer numbers, regular cleaning of shop premises, and face masks for staff.
Workers have gradually gone back to work after being furloughed as more businesses reopened their high street shops.
BDO’s Employment Index fell for the fourth month in a row to 106.24 though, which it writes is ‘a trend likely to continue as Government support is rolled back further.’