Most businesses and individuals alike are glued to the news and habour real concerns for the future. The term “recession” is being used regularly and all are either preparing to or are already tightening their belts. Whilst having to manage rising costs, labour shortages and the need to innovate to keep up with changing consumer demand, is the overall impression currently as difficult as was initially thought or is there an air of resiliance about?
According to research, it seems that the overall impression is that second quarter activity in the UK is set to be much less soft than many had initally feared.
“Manufacturing in particular seems to be holding a resiliant position with a healthy growth of 1.4% m/m increase. With vehicle production likely to enjoy further momentum on value chain improvements which could once again surprise with postive growth in the next few months. Interestingly construction also came in on the strong side, growing 1.5% on the month driven by commercial as much as private new work.
Services however presented a rather mixed picture with only seven of 14 sub-sectors posting positive contributions. Human health and social work activities continued to make headlines and rose 2.1% m/m as a ramp-up in GP appointments more than offset the rampdown of COVID-19 Test & Trace activity.
Elsewhere, wholesale & retail and finance posted the biggest negative contributions. Overall, consumer-facing activities had a difficult month with weak retail and recreation offsetting a whopping 11% m/m jump in travel agency, tour operator and other reservation services and related activities.
Many businesses reported ongoing input and output price increases as an important theme: “Many referenced the cost of fuel and electricity, while others cited price increases in nickel, cobalt, aluminium, steel, paper, fish, and cooking oil.” However, this view is challenged by the most recent data – both the firmer-than-expected Q2 GDP and the surge in energy prices raising the prospect of a larger increase in retail energy price cap in October. The BoE, base current inflation forecast on a 40% increase of gas/electric prices in October but the latest energy futures suggest it could be much more.”
We are going through difficult times, that cannot be disputed but as they say, diamonds are only created under immense pressure. Pressure sometimes forces innovation and an improvement in thinking and reduction in unnecessary process. We have to remain positive and resilient, our industry has successfully survived many a storm.