PwC comments on GDP data for May

Jonathan Gillham, chief economist at PwC, comments on GDP data for May:

“Data for the three months of March, April and May show a continued sharp contraction in GDP of 19.1%. However, May’s data does imply that the decline has plateaued - the economy is still at incredibly low levels of production - it’s just less bad than the reductions we saw in April. 

"There are some small signs of activity levels picking up with elements of the manufacturing sector showing growth as essential elements of production continued through the lockdown, although overall activity levels are still 22.3% lower than in February. 

"It’s not surprising that we are seeing record growth of 12% in online retail. Other sectors have shown resilience too; financial services and transportation services have also managed to stem the tide. However, we should not get carried away - services sector output is still 24.4% below its pre-Covid levels. 

"The message from May’s data appears to be that the economy is currently operating at a very low level of output, but some sectors are starting to increase output from what was observed in April. Looking ahead we would expect this trend to continue, but the big question will be - how rapidly can the economy bounce back?"

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