UK economy slows sharply as staff shortages hit record highs, survey finds Business News

Britain’s economy slowed sharply in August as staff shortages hit the worst level on record, leaving companies unable to meet growing demand, according to a closely watched survey.

Business leaders have recorded the slowest pace of growth since the height of the lockdown in February. The IHS Markit Purchasing Managers Index (PMI) stood at 55.3 in August, well below the 58.7 forecast by economists. PMI surveys are considered to be a good predictor of future economic growth. Any reading above 50 indicates the economy is expanding.

“An unusually large slowdown in global activity in August offers a stark warning to the UK economy that the accelerating levels of growth we saw earlier this summer are not sustainable,” said Duncan Brock, group director at CIPS, which helps to compile the survey. .

“It was the slowest production expansion in six months, and the worst personnel and equipment shortages on record are mainly to blame.”

Chris Williamson, chief economist at IHS Markit, said there were “clear signs of a slowing recovery” in the third quarter of the year.

“The increase in the number of cases of the virus deters many forms of spending, especially from consumers, and has slowed growth due to worsening staff and supply shortages.”

The number of people testing positive for Covid in the UK rose 13.5% to 227,391 over the past week, up to Sunday, according to the latest official figures.

The latest data comes as food companies have sought to recruit prisoners to resolve a worsening recruitment crisis.

Supply issues have forced Nando’s to temporarily close outlets across Britain and food industry bosses have warned more restaurants could close in the coming weeks.

Sector heads said Brexit was to blame for problems in the country’s supply chain – as industry struggles to cope with the return of production workers to the EU and a shortage drastic amount of truck drivers able to come to the UK.

The food industry is also suffering from a long-term labor shortage, predating the pandemic and Brexit.

Nick Allen, managing director of the British Meat Processors Association, said the industry was struggling to bring many product lines to supermarkets and restaurants – with the UK meat production workforce having decreased by up to 20%.

“The supply issues stem from the underlying labor issues that have arisen since Brexit … It’s certainly Brexit related, but it’s also the immigration decisions our politicians are making since Brexit,” Allen said .

He added: “Nando is the tip of the iceberg. I think we will see more and more [closures]. Some people are still trying to open their restaurants – but they have a hard time finding staff and fighting over deliveries. “

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This notice was published: 2021-08-23 11:42:59

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