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- Services sector contracts amid delta variant outbreak
Supply chain problems in the UK, and beyond, are weighing on international distribution and outsourcing group Bunzl.
Bunzl has flagged this morning that shortages of materials and workers are having a knock-on impact, as its customers in the factory and building sectors struggle to find parts and hire staff.
Revenue in our safety businesses declined significantly during the first half of the year as both manufacturing and construction customers have been slow to return to normal activity whilst at the same time sales of Covid-19 related items reduced. Major infrastructure projects across the UK are several months behind schedule and both labour and materials shortages are limiting a return to normal activity levels in our target sectors.
Our cleaning & hygiene supplies business has also seen a decline in revenues as offices, entertainment venues and travel hubs have remained closed or operating with minimal staff, with many employees working from home.
The pandemic has continued to cause disruption to our foodservice businesses, with lockdowns from January to April and restrictions remaining throughout most of the second quarter. Social distancing rules have resulted in reduced capacities in restaurants and hotels, large numbers of the workforce have been working from home and there have been limits on travel and large-scale events. However, with most restrictions now lifted, the hospitality industry is starting to reopen as we enter the second half of the year. Encouragingly, at the end of the first half, the foodservice business was already in a stronger position than it started the second quarter, although it remains significantly below 2019 levels.
Our healthcare businesses have continued to supply PPE to both hospitals and the NHS direct which has resulted in very strong growth in this sector, although elective surgery remains below normal levels.
European stock markets have opened cautiously, with the region-wide Stoxx 600 index up 0.1% in early trading.
That puts European markets on track for their seventh straight month of gains, having gained 2.5% during August.
