Page 11 - Industrial Technology EXTRA - Brexit Briefing

BREXIT BRIEFING

OUTPUT BY SECTOR

business services, transportation and
manufacturing. The manufacturing and
transport sector improvements were linked
UK COMPOSITE EMPLOYMENT INDEX to reviving global trade and a temporary
boost from Brexit-related stockpiling, which
reportedly buoyed order books and exports
during the month.

“While job losses continued to be reported
during the month, it was encouraging to see
the rate of job cutting ease to the lowest
since the start of the pandemic. Business
optimism about the year ahead also
remained buoyant, reflecting the light at the
end of the tunnel created by the roll-out of
the Covid-19 vaccines.”

Duncan Brock, group director at CIPS, said:
“Job shedding was reduced this month to the
slowest rate the pandemic began as
optimism was maintained across
manufacturing and services sectors about
operating conditions in 12 months’ time.
However in the near-term supply chain
commodity prices resulted in the steepest since the downturn began in March. A managers identified some serious obstacles
rate of cost inflation since June 2018. In number of survey respondents commented that could impede further progress and pull
some cases, manufacturers noted that that hopes of a rebound in business activity the sectors into recession again.
supply chain difficulties had restricted their in the next 12 months, alongside the use of
production volumes in December. This furlough schemes, had encouraged them to “Though manufacturing was buoyed up by
contributed to a rise in unfinished work retain staff where possible. Brexit panic- buying and saw the fastest rise
across the manufacturing sector for only the in purchasing since August 2013, delivery
second time in the past three years. Chris Williamson, chief business economist times increased at the third highest rate since
at IHS Markit, said: “The UK economy 1992 which meant many essential materials
UK services PMI returned to growth in December after the were not getting through. Manufacturing
At 49.9 in December, the seasonally adjusted lockdown-driven downturn seen in companies were also paying the price of
IHS Markit/CIPS Flash UK Services PMI November, adding to signs that the hit to the goods shortages with the highest rise in cost
Business Activity Index rose from a five- economy from the second wave of virus inflation since June 2018 as shipping and
month low of 47.6 in November but remained infections has so far been far less harsh than commodity prices soared.
fractionally below the neutral 50.0 threshold. the first wave in the spring.
While some service providers noted a rise in “In services the watchword was ‘wait’. Clients
activity following an easing of lockdown “The recovery lacked vigour, however, as the delayed placing orders as potential Brexit
measures, there were still widespread service sector remained under particular disruption loomed large and more
reports that COVID-19 restrictions had either strain, contracting marginally again as lockdowns restricted footfall in consumer-
reduced customer demand or even led to ongoing social distancing measures due to facing businesses resulting in new orders
ongoing business closures. tiered lockdowns continued to hit many parts dropping for the third month in a row. As
of the economy. Consumer-facing services, Covid worries and no-deal uncertainty
New business volumes dropped for the third notably hotels, restaurants and tourism, remains, firms will continue to face the most
month running in December. However, reported further marked declines in output, challenging business conditions in a
staffing levels were cut at the slowest pace largely offsetting renewed growth in generation for the next few months.”

INDUSTRIAL TECHNOLOGY EXTRA – WINTER 2021 11