Economic recovery slows down due to staffing and supply shortages

Due to the demands of the pandemic and the responsibility and awareness individuals must now have for others’ health, we have seen shortages in both staff members and supplies.

While there is still some growth as evidenced by the Purchasing Managers’ Index for the month of August, it has hit a sixth month low. The government statistics have shown that this has happened after the 2.5% drop in retail sales between June and July 2021, with non-food stores reporting a fall of 4.4% in sales volumes.

Researchers have suggested that the bounce-back from the pandemic is beginning to lose its momentum. The acceleration of the economy and growth that we have witnessed earlier in the summer are not sustainable.

Although this is a decrease on recent months, the statistics still evidence that this is 5.8% higher than in February 2020, prior to the impact of the pandemic.

Chris Williamson, IHS Markit economist says that, this decrease in companies’ output is mainly due to the worst shortages of staff and supply that has been seen in more than 20 years of survey history.

The shortages were mainly due to the increasing number of cases and the previous self-isolation requirements – which were relaxed for individuals who had received both vaccines on 16^th August 2021. Despite the easing of what has often been called the ‘pingdemic’ the economy has still struggled to ‘gain fresh momentum’ said Kieran Tompkins an assistant economist at Capital Economics.

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