UK private sector expands at fastest pace in seven years

Britain’s private sector expanded at its fastest pace for seven years in August as the twin engines of the economy, the manufacturing and services sectors, surged back to life.

But businesses, which have brought millions of workers back from furlough, warned that the rise in activity was not enough to prevent a “steep and accelerated” fall in employment. With the outlook remaining uncertain, they said many furloughed staff had little to do when they returned to work and faced losing their jobs.

UK national debt hits £2tn for first time, as PMIs surge – business live

The increase in demand for services and manufactured goods, which followed the easing of the lockdown during the summer, sent the IHS Markit CIPS flash UK composite output index to 60.3 in August, up from 57 in July. A figure above 50 indicates expansion.

A backlog of maintenance work after the shutdown in April accounted for much of the increase in business services while the restocking of depleted supplies and the return of car buying helped the UK’s manufacturing industry increase output.

Treasury ministers are likely to cheer the bounceback in activity after deep divisions in cabinet over how fast to unlock the economy as Covid-19 cases began to fall.

Rishi Sunak’s initiative to boost the restaurant trade with his “eat out to help out” subsidy is credited with encouraging consumers to leave home and shop on the high street. But the chancellor will be concerned that business confidence has fallen and the rate of jobs cuts has accelerated.

IHS Markit also warned that businesses were still operating at levels well below those before to the pandemic. It said figures showing Britain was in the middle of a deep recession and the Treasury’s warning that many subsidies would end in October had sent business confidence tumbling.

UK retail and hospitality job cuts on back of Covid-19 crisis

Marks & Spencer – 7,000 jobs
18 August: Food, clothing and homewares retailer cuts jobs in central support centre, regional management and stores.

M&Co – 400 jobs
5 August: M&Co, the Renfrewshire-based clothing retailer, formerly known as Mackays, will close 47 of 215 stores.

WH Smith – 1,500 jobs
5 August: The chain, which sells products ranging from sandwiches to stationery, will cut jobs mainly in UK railway stations and airports. 

Pizza Express – 1,100 jobs
4 August: The restaurant chain plans the closure of 70 restaurants as part of a rescue restructure deal.

Dixons Carphone – 800 jobs
4 August: Electronics retailer Dixons Carphone is cutting 800 managers in its stores as it continues to reduce costs.

DW Sports – 1,700 jobs at risk
3 August: DW Sports fell into administration, closing its retail website immediately and risking the closure of its 150 gyms and shops.

Marks & Spencer – 950 jobs
20 July: The high street stalwart cuts management jobs in stores as well as head office roles related to property and store operations.

Ted Baker – 500 jobs
19 July: About 200 roles to go at the fashion retailer’s London headquarters, the Ugly Brown Building, and the remainder at stores.

Azzurri – 1,200 jobs
17 July: The owner of the Ask Italian and Zizzi pizza chains closes 75 restaurants and makes its Pod lunch business delivery only

Burberry – 500 jobs worldwide
15 July: Total includes 150 posts in UK head offices as luxury brand tries to slash costs by £55m after a slump in sales during the pandemic.

Boots – 4,000 jobs
9 July: Boots is cutting 4,000 jobs – or 7% of its workforce – by closing 48 opticians outlets and reducing staff at its head office in Nottingham as well as some management and customer service roles in stores.

John Lewis – 1,300 jobs
9 July: John Lewis announced that it is planning to permanently close eight of its 50 stores, including full department stores in Birmingham and Watford, with the likely loss of 1,300 jobs.

Celtic Manor – 450 jobs
9 July: Bosses at the Celtic Collection in Newport, which staged golf’s Ryder Cup in 2010 and the 2014 Nato Conference, said 450 of its 995 workers will lose their jobs.

Pret a Manger – 1,000 jobs
6 July: Pret a Manger is to permanently close 30 branches and could cut at least 1,000 jobs after suffering “significant operating losses” as a result of the Covid-19 lockdown

Casual Dining Group – 1,900 jobs
2 July: The owner of the Bella Italia, Café Rouge and Las Iguanas restaurant chains collapsed into administration, with the immediate loss of 1,900 jobs. The company said multiple offers were on the table for parts of the business but buyers did not want to acquire all the existing sites and 91 of its 250 outlets would remain permanently closed.

Arcadia – 500 jobs
1 July: Arcadia, Sir Philip Green’s troubled fashion group – which owns Topshop, Miss Selfridge, Dorothy Perkins, Burton, Evans and Wallis – said in July 500 head office jobs out of 2,500 would go in the coming weeks.

SSP Group – 5,000 jobs
1 July: The owner of Upper Crust and Caffè Ritazza is to axe 5,000 jobs, about half of its workforce, with cuts at its head office and across its UK operations after the pandemic stalled domestic and international travel.

Harrods – 700 jobs
1 July: The department store group is cutting one in seven of its 4,800 employees because of the “ongoing impacts” of the pandemic.

Harveys – 240 jobs
30 June: Administrators made 240 redundancies at the furniture chain Harveys, with more than 1,300 jobs at risk if a buyer cannot be found.

TM Lewin – 600 jobs
30 June: Shirtmaker TM Lewin closed all 66 of its outlets permanently, with the loss of about 600 jobs.

Monsoon Accessorize – 545 jobs
11 June: The fashion brands were bought out of administration by their founder, Peter Simon, in June, in a deal in which 35 stores closed permanently and 545 jobs were lost.

Mulberry – 470 jobs
8 June: The luxury fashion and accessories brand is to cut 25% of its global workforce and has started a consultation with the 470 staff at risk.

The Restaurant Group – 3,000 jobs
3 June: The owner of dining chains such as Wagamama and Frankie & Benny’s has closed most branches of Chiquito and all 11 of its Food & Fuel pubs, with another 120 restaurants to close permanently. Total job losses could reach 3,000.

Clarks – 900 jobs
21 May: Clarks plans to cut 900 office jobs worldwide as it grapples with the growth of online shoe shopping as well as the pandemic.

Oasis and Warehouse – 1,800 jobs
30 April: The fashion brands were bought out of administration by the restructuring firm Hilco in April, with all of their stores permanently closed and 1,800 jobs lost.

Cath Kidston – 900 jobs
21 April: More than 900 jobs were cut immediately at the retro retail label Cath Kidston after the company said it was permanently closing all 60 of its UK stores.

Debenhams – 4,000 jobs
9 April: At least 4,000 jobs will be lost at Debenhams in its head office and closed stores after its collapse into administration in April, for the second time in a year.

Laura Ashley – 2,700 jobs
17 March: Laura Ashley collapsed into administration, with 2,700 job losses, and said rescue talks had been thwarted by the pandemic.

“Concerns about the speed and duration of the recovery resulted in sustained job cuts across the private sector during August,” it said. “In contrast to the positive trends for output and new orders, latest data indicated the fastest pace of decline in employment numbers since May.

“Lower payroll numbers were primarily attributed to redundancy programmes in response to depleted volumes of work and the need to reduce overheads before the government’s job retention scheme winds down. A sustained decline in backlogs of work across the private sector economy also suggested that incoming new orders fell short of business capacity.”

Some economists have argued that a dash for growth may only bring short-term gains if it is mishandled and forces the government to impose further lockdowns.

There are already concerns that Birmingham will be forced into a lockdown in addition to the those already imposed across Greater Manchester and several other cities and regions in recent weeks.

A warning as to how further lockdowns might adversely affect the economy was shown in a similar survey of the eurozone, which is considered to be two or three weeks ahead of the UK in tackling the coronavirus. Many countries have restricted shopping and other activities to bring down infection rates.

The flash IHS Markit eurozone composite PMI posted 51.6 in August, down from July’s reading of 54.9, indicating a dramatic slowdown in the pace of output growth. In July the first expansion of activity in five months was recorded and a further rate of expansion was expected.

However, the services sector flatlined, leaving only the eurozone manufacturing sector to expand in August.

Source: Read Full Article