Brexit – The Before and After Impact!
July has seen an interesting set of economic figures released to show how the economy was performing before the Brexit vote and also the impact on the economy after the vote.
According to the Office of National Statistics, the economy grew by 0.6% in the three months to the end of June 2016 which was higher than the estimated figure of 0.5%. Second-quarter GDP grew faster than expected with figures up from 0.4% growth in the previous quarter. This period saw the biggest upturn in industrial output since 1999, particularly from car factories and pharmaceutical firms. Industrial output, including manufacturing, grew by 2.1% in the quarter. The services sector, the largest part of the UK economy, grew 0.5%, while construction and agriculture fell 0.4% and 1% respectively. The strongest growth was seen in April.
The picture after the results of the Brexit Vote paint a very different picture to the one outlined above. The IHS Markit’s Purchasing Managers’ Index (PMI) surveyed more than 650 services companies, from sectors including transport, business services, computing and restaurants. Their data suggests that the economy contracted in the month after the results. Both manufacturing and service sectors saw a decline in output and orders. However, exports picked up, driven by the weakening of the pound.
The last time that the index fell to these low levels was the global financial crisis in 2008/9. However, this is the first economic report to be published since Brexit and only relates to one month, not a quarter. Financial markets have since stabilised and hopefully this will continue. We are in unchartered territory so the next quarter’s results will be very interesting.
Intro Personnel continues to work closely with our clients to assess the impact of the Brexit vote and to provide support accordingly where required.
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