DIY and Gardening Lead The Way ...
Retail Sales bounced back in June. DIY and Gardening were the best performing sectors, along with household electrical stores and dispensing chemists.
Overall retail sales were up by 1.7% excluding fuel. This compares to a fall of 19% and 10% in April and May. Food sales were up by over 5% in the quarter. Binge drinking in April eased. Alcohol sales, up by 40% in April, fell by over 4% in the latest month available.
Overall non food sales were down by 17%. Clothing and footwear sales were down by over 30%. Open and they will come the message to retail. The figures represent a dramatic improvement on the period of lock down. Internet developments continue to dominate. Online sales were 32% of all transactions in June and 32% for the quarter as a whole.
Food sales on line have doubled during lock down, accounting for 11% of total sales. Non food sales on line eased back slightly as stores reopened. 33%, that's one in three transactions, of non food sales, were secured online. Clothing sales lead the way. The impact on high street and shopping centres, an irreversible trend of shrinking retail footprints and slowing consumer footfall.
Output Gathers Momentum in July ...
"The UK economy started on a strong footing" according to Chris Williamson Chief Business Economist at IHS Markit "as business continued to reopen doors after the Covid lock down". July data indicated a marked improvement in business conditions. The latest survey data indicated a return to growth for the service sector and a much faster rise in manufacturing production than seen in prior months.
The manufacturing index increased to 53.6 in July from 50.1 in June. The service sector index, increased to 56.6 in the month, from 47.1 prior month. The overall composite index increased to 57.1 from 47.7 in June.
"The momentum was fueled by the release of pent up demand as clients and customers returned to spending. Businesses were able to open their operations as staff returned." according to Duncan Brock Group Director at CIPS.
The overall picture suggests a rapid bounce back as the economy reopens. The data supports the prospect of a V shaped recovery. Just as well. The economy appears to have contracted by 24% in the second quarter. We expect a steady improvement in the third quarter, with output still down by around 8% in the final three months of the year.
Three million jobs could be at risk unless the furlough scheme is extended to the end of the year. Government borrowing in the first three months of the financial year was £128 billion. The Office For Budget Responsibility expect borrowing for the full year to be over £300 billion for the financial year as a whole. Time yet to determine the shape and speed of the recovery. Time yet to determine, the shape and speed of the jobs recovery specifically ... before spending just a little bit more ...
The Saturday Economist
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