Shortages of workers and raw materials triggered by supply chain constraints is threatening to stall the UK’s economic rebound from the Covid pandemic, show new figures published today.

IHS Markit / CIPS’ latest flash UK composite PMI fell to 57.7 in July, the lowest reading since March.

The reading dropped markedly over the last month, down from 62.2 in June. A reading above 50 indicates business activity expanded.

Read more: Weekend Read: Job market tension threatens to derail Britain’s economic recovery

Output was constricted by shortages of raw materials and workers, IHS Markit said, caused by severe mismatches in global commodity and labour markets.

Firms are struggling to restore output to pre-pandemic levels amid soaring demand triggered by economies emerging from Covid restrictions, leaving businesses struggling to secure key inputs used in production processes.

Worker shortages are being fuelled by a combination of the so-callled “pingdemic” and greater reluctance to return to jobs from furlough.

High levels of staff are being forced to self-isolate after being pinged by the NHS Covid-19 app due to them coming into contact with someone who tested positive for coronavirus.

Duncan Brock, group director at CIPS, said: “Acute material and staff shortages in certain sectors interrupted the rhythm of recovery in private sector business as signs of malaise crept in affecting output, new orders and business optimism.”

Read more: Pingdemic: Food workers added to self-isolation exemption list

The flash UK services business activity index hit 57.8, while the flash UK manufacturing PMI
was 60.4 in July, both four-month lows.

A resurgence in virus cases knocked consumer confidence, causing demand to fall, IHS Markit said.

Chris Williamson, chief business economist at IHS Markit, said: “July saw the UK economy’s recent growth spurt stifled by the rising wave of virus infections, which subdued customer demand, disrupted supply chains and caused widespread staff shortages, and also cast a darkening shadow over the outlook.”