Business confidence in Britain’s dominant services sector surged to its highest level in four months in June raising hopes of a strong economic bounce.
The closely watched PMI index from analysts IHS Markit rose from a reading of 29 in May to 47.1 in June, when “non-essential” shops were allowed to reopen for the first time since the start of lockdown. A reading of 50 level signals growth.
Only a third of the businesses surveyed said activity had dropped in June, down from 54 per cent in May and 79 per cent in the April.
Job cuts in the sector - which accounts for almost four fifths of Britain’s output - were also at their slowest since the lockdown began.
Tim Moore, economics director at IHS Markit, said: “June data highlights that the worst phase of the service sector downturn has passed as more businesses start to
reopen and adapt their operations to meet social distancing requirements.
“Encouragingly, more than one-in-four service providers reported an expansion of new business during June, which was commonly attributed to pent up demand and the
phased restart of the UK economy. However, lockdown measures continued to hold back travel and leisure.”
Duncan Brock, group director at the Chartered Institute of Procurement & Supply, said:“A cessation in some lockdown policies enabled the services sector to emerge tentatively from the shadows last month and reclaim some normality, with the PMI leaping to a fourmonth high.
“Though the sector remained in overall contraction territory, the re-opening of businesses premises unclogged levels of dampened demand and created hope that the worst impact of the pandemic could be over.”
