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The results for August indicate that business turnover has increased for the fourth month in a row, but remains significantly below pre-pandemic levels. Compared to July, most industries in the services sector are continuing to expand, but the manufacturing sector shows broadly stable turnover in August.
In August, compared to one month ago, the all industry turnover index is 60.0, indicating that more companies have reported increasing sales than decreasing sales, continuing the recovery after large decreases in March and April.
Compared to 12 months ago, the all industry business turnover index is 34.4, up from 29.9 in July. This reinforces the broad indication that there has been a further increase in business activity between July and August, but demonstrates that most companies still report lower sales than last year.
Although the index has increased again in the latest month, it does not give a direct indication of the actual size on any increase in total turnover, or in GDP as a whole. Estimates of Monthly GDP for August will be published on 21 October 2020.
About This Release
The Monthly Business Turnover Index is based on the ONS Monthly Business Survey and Retail Sales Inquiry. These are the largest data sources used for GDP statistics, and cover the output of around half the economy.
The index is similar to the IHSMarkit PMI indicators. It reports the net balance of firms reporting increasing or decreasing turnover, in real terms, compared to last month and to 12 months ago. An index value of 50 is in balance and indicates that turnover is broadly unchanged compared to last month or 12 months ago. Values below 50 indicate that more companies are showing decreased turnover than increased turnover, broadly indicating falling sales, whereas values above 50 indicate increasing sales.
For the first time, this release includes the index compared to one month ago. This has been developed to give an additional indicator of recent changes which may not be clear when compared to 12 months ago.
Further information on these statistics is available here.
Business Turnover Index by Industry
In August, most industries in the services sector are showing expansion compared to July, with values above 50 indicating that more businesses reported increases than decreases.
The highest values are in the accommodation and food sector (84.5), and the non-food other retail sector 72.1), where strong growth can be expected after businesses were permitted to reopen during July. The wholesale and motor trades sector is showing contraction relative to July (34.0), following strong expansion in recent months.
Manufacturing sector turnover is indicated to be broadly flat this month (50.2), with similar numbers of businesses reporting increasing and decreasing sales compared to July. This follows expansion in the sector during the previous three months.
Compared to 12 months ago, turnover remains down in all industry sectors except for the food retail industry, with values below 50 indicating that more businesses are reporting decreased turnover than increased turnover.