UK Recovery Falters In August As Firms Suffers From Shortage Of Staff

Economic recovery of the United Kingdom was hit this month because of shortages of staff and supply, showed a closely watched survey.

The IHS Markit/CIPS Composite Purchasing Managers’ Index (PMI) dropped to a six-month low for August at 55.3, compared to 59.2 in the previous month.

Numbers over 50 is indicative of growth while less than that denotes contraction.

Even though the number of the UK is over the 50 mark, researchers said the numbers for August shows momentum of recovery of the economy from the pandemic hit is slowing down.

The figures were “a stark warning”, said CIPS group director Duncan Brock.

The “abnormally large slowdown in overall activity” indicated that the high rates of growth that was experienced by the economy during the summer “not sustainable”, he said.

“The worst shortages of staff and materials on record are mostly to blame,” he added.

“Despite Covid-19 containment measures easing to the lowest since the pandemic began, rising virus case numbers are deterring many forms of spending, notably by consumers, and have hit growth via worsening staff and supply shortages,” said IHS Markit economist Chris Williamson.

“Supplier delays have risen to a degree exceeded only once before – in the initial months of the pandemic – and the number of companies reporting that output had fallen due to staff or materials shortages has risen far above anything ever seen previously in more than 20 years of survey history.”

Companies are finding it difficult to maintain staffing levels because of the requirement for self-isolation for people who happen to come into contact with Covid-19 patients. That rule however has been dropped from August 13 for those who have had their double doses ofCvoid-19 vaccine.

The slowdown in recovery was more than previously thought according to the data derived from the latest survey, said Kieran Tompkins, assistant economist at Capital Economics.

“The economy struggled to gain fresh momentum in August, despite the apparent easing of the ‘pingdemic’,” he said.

He added this put at a downward risk the forecasts made previously of the UK economy returning back to its pre-pandemic levels by October this year.

On the other hand, in the three months to August, manufacturing output growth was also shown to have slowed down in another survey even though the number was still firm by historical standards.

However according to the latest monthly CBI Industrial Trends Survey, stock levels weakened to a new low for the third consecutive month.

“Early signs from the data suggest that growth in activity may have peaked,” said CBI lead economist Alpesh Paleja.

(Adapted from


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