Well, possibly. Early July brought some welcome respite for the Chancellor as a series of independent surveys reported strong growth in key sectors of the economy.
First in line was the Markit/CIPS UK Manufacturing PMI survey, based on information collected in the second half of June, which showed UK manufacturing activity at its highest level since April 2011, and with new business at its highest since February 2011. The overall PMI index rose to 52.5 in June from 51.5 in May (where 50 implies no change).
The results, said Markit, had reflected demand not just in the UK but also from Europe, China, North America, Scandinavia and the Middle East. The strongest manufacturing sectors were in textiles, clothing and food and drink; and price pressures had remained subdued, with input costs declining for the third straight month – partly because of lower costs for chemicals, feedstock, metals, packaging and plastics, but partly also because of a rise in competitive pressure and an improvement in the sterling exchange rate.
Next came a report from the British Chambers of Commerce, which concluded that second-quarter business confidence in the UK had been at its highest level since 2007. The country’s export balances remain strong, it said, with the net services export deliveries balance reaching its highest level (+36%) since the survey began. Manufacturing exports had also excelled, with a score of +23, the best since Q2 2012. You can read the report at http://tinyurl.com/pwjtxv8.
Final corroboration came from another Markit survey, the Markit/CIPS Services Purchasing Managers’ Index, which showed services growth at its highest level since early 2011. The UK output index rose to 56.9 in June, up from 54.9 in May; in late 2008, by comparison, it had been as low as 41.
What else will it take to cheer the Chancellor up? Some more news, perhaps, that echoes June’s pronouncement on economic growth from the Office of National Statistics. The ONS said that, having reworked its quarterly growth figures for last year, it was now apparent that we had never had a double dip recession. The new figures for Q1 2012 had shown zero growth instead of a 0.1% decline, which meant that the two consecutive quarters of shrinkage required by the definition of a recession hadn’t happened. Hurrah, we’re saved by a whisker.