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Here’s Andrew Wishart of Capital Economics on today’s UK purchasing managers survey:
Taken literally the fact the flash composite PMI remained well below the no-change level of 50 in May suggests that activity fell further as it should compare activity to the previous month. But many respondents appear to be answering the alternate question of “how is activity compared to normal?”. So instead it appears to be suggesting that the low point for activity was reached in April, but that it is still well below normal in May.
The recovery in the manufacturing PMI from 32.6 to 40.6 is probably a sign that some industrial plants have reopened on government advice. And the services index recovered from 13.4 to 27.8, in line with anecdotal evidence that firms have restarted limited operations, such as take-out options from restaurants.
Flash UK Composite #PMI at 28.9 in May (13.8 - Apr) to signal further contraction in the UK economy, but with rates of decline softening from April as COVID-19 restrictions were eased. Read more: https://t.co/zGCpgQst0k pic.twitter.com/CSWpXZO47F
A few weeks ago, there was lots of talk about V-shaped recoveries.
Economists hoped that growth would bounce back sharply from the initial shock of Covid-19, as companies rapidly caught up on lost business.
“The PMI data in from the UK and Europe suggests that the outlook is improving. That is to be expected, as the surveys are taken mid-month and economies were more open than they were in mid-April. But with UK Composite PMI at 28.9, albeit up from 13.8 in April, and the Eurozone Composite PMI reading at 30.5 the outlook is still grim. Markets may well take this as a sign that the nadir has been reached, although recovery is some time off.”
Weak #PMI readings echo Google's Mobility data that show #UK activity still significantly down on pre-virus levels. More evidence that a 'V-shape' recovery now very unlikely pic.twitter.com/ciZGiJgmg9
This made me laugh! @BertColijn
Despite the improvement in Eurozone PMI, anybody hoping for a v-shaped recovery should go back and pick another alphabet!https://t.co/rGi0tp1d8L
Main message: May was very slightly less bad, but still pretty awful. https://t.co/6aocT8A7W9
Continue reading...from The Guardian https://ift.tt/2yq5SxW
