UK businesses suffered a “sharp slowdown” in August as staff shortages and supply chain issues dented the country’s economic recovery.
Data from UK information provider, IHS Market, shows the index that tracks output among UK companies fell to 55.3 – a six-month low.
The reading was a steep drop from July’s 59.2, and came as staff shortages and problems across supply chains constrained the ability of businesses to do their jobs.
Even though the UK saw the fastest rise in employment since IHS data began in 1998, backlogs of work increased for the sixth month in a row as businesses struggled to keep up with customer demand.
The August reading remains above 50 – which means the economy is growing – but the pace of progress has clearly slowed.
The data came as property investment trust Shaftesbury said shoppers were returning to the high street again.
The London-listed firm said the retailers in its buildings had reported improving trade, focused on the weekend.
To find out more about how we can assist you with your Second Charge Mortgage please click here
Weekly footfall is now at between 50 per cent – 60 per cent of its pre-pandemic levels, Shaftesbury said.
Encouragingly, it put the recovery down to more than a rise in Londoners venturing out, stating that people were once again travelling to the capital for shopping trips and that there had been a visible rise in tourists visiting too.
Shaftesbury chief executive Brian Bickell said: “We expect that early autumn will see a return of the West End’s exceptionally large office-based working population, which has always been an important contributor to our local weekday economy.”
He added that the momentum of the past four months had provided “a sound platform for the continuing revival of London’s West End in the important months ahead, leading up to Christmas and into the new year, and the prospects for a return to pre-pandemic patterns of life and activity”.
The improvements can be seen in the rent that Shaftesbury was able to collect in recent months.
In the three months to June 30, the company collected 51 per cent of contracted rent, compared with just 40 per cent between January and March this year.
It is also filling more space in the high streets.
At the end of March, 8.4 per cent of Shaftesbury’s sites lay vacant, but by the end of July nearly half of this space had been filled and the figure had fallen to 4.6 per cent.
Elsewhere in the economic data, weaker recoveries were seen in both the manufacturing and service sectors, with the later recording the greatest loss of momentum since July.
Analysis of comments provided by survey respondents suggested that the incidences of reduced output due to shortages of staff or materials were fourteen times higher than usual, and the largest since the survey began in January 1998.
New order growth eased slightly in August, with stronger export sales helping to cushion a slower recovery in domestic demand.
By Bradley Gerrard
Discover our Second Charge Mortgage Broker services.