The UK private sector logged one of the fastest expansion on record in June as there were marked increases in output across the manufacturing and services sectors as the economy continued to reopen, following the COVID-19 lockdown, a closely watched survey showed Wednesday.
The flash composite output index dropped to 61.7 in June from 62.9 in May, data compiled by IHS Markit and the Chartered Institute of Procurement & Supply revealed. The score was forecast to fall slightly to 62.8.
The fall in the composite PMI indicates that the pace of the recovery may have peaked, Kieran Tompkins, an economist at Capital Economics, said. Despite the four-week delay to the final easing of restrictions, monthly GDP will return to its February 2020 level in August.
The services Purchasing Managers’ Index fell unexpectedly to 61.7 in June from 62.9 a month ago. Economists had forecast the index to climb to 63.0.
Still the index signaled a strong expansion in service sector activity in line with looser COVID-19 restrictions and growing customer demand.
The manufacturing PMI came in at 64.2 in June, down from 65.6 in the previous month. The expected reading was 64.0. Nonetheless, this was the second-highest score since the survey began in January 1992.
The survey showed that new orders continued to surge, with marked increases seen across both monitored sectors.
Companies responded to rising workloads by taking on extra staff in June. Moreover, the rate of job creation quickened to the strongest in the series history.
The rate of input cost inflation accelerated for the fifth month running and was the joint-fastest on record. In turn, the rate of output price inflation hit a fresh record high for the second month running.
Looking ahead, companies remained confident that output will increase over the next 12 months as the recovery from the COVID-19 pandemic continues.
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