U.K. Factory Jobs as Risk Even as Output Stops Falling

(Bloomberg) -- U.K. manufacturing stabilized in June as lockdown restrictions lifted, though there are rising concerns about employment, a gauge for the sector showed Wednesday.

IHS Markit’s Manufacturing Purchasing Managers’ Index rose to 50.1 in June, unchanged from an initial estimate, from 40.7 in May. Expectations for a further loosening of restrictions lifted confidence.

Still, employment fell for a fifth consecutive month, and survey respondents reported cost-control efforts and staff restructuring, as well as a lack of replacement for employees leaving firms.

Bank of England Chief Economist Andy Haldane said Tuesday that the outlook for jobs is the biggest risk to the U.K., particularly as the government begins to taper its furlough program in August.

“The main focus is now shifting toward the labor market,” said Rob Dobson, director at IHS Markit. “Economic conditions will need to improve markedly across the U.K., or some support retained, if the labor market downturn is to avoid becoming entrenched.”

©2020 Bloomberg L.P.