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Summary
- The widespread growth suggests that the UK economic recovery has moved into the fast lane.
- The tourism and recreation sector’s economic activity grew for the first time in April since August 2020.
- Going forward, the UK manufacturing sector will need to fix the ongoing problem of supply chain bottlenecks for further growth.
The latest Lloyds Bank UK Recovery Tracker for April 2021 has displayed growth in economic output across all the 14 sectors as coronavirus restrictions were eased out across the nation. The healthy trend has been observed for the first time since August 2018.
For March 2021, 11 of the 14 sectors had recorded an output growth, and corresponding number for February was merely three and that for January was six.
The widespread growth suggests that the UK economic recovery has moved into the fast lane and spread out even to the hardest hit-sectors like travel and tourism, said Jeavon Lolay, Head - Economics and market insight, Lloyds Bank Commercial Banking. The latest lifting up of the Covid-19 restrictions will provide a further fillip to the economy, with rapid growth predicted during Q1 2021.
The Lloyds tracker is based on the responses to IHS Markit’s PMI (purchasing managers’ index) surveys, which cover 1,500 carefully selected companies across a mix of sectors.
The group’s share price (LON: LLOY) was down 0.39 per cent to GBX 48.43 in the early morning trading hours on 19 May.
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Also Read: UK Economy Recovered from Pandemic Lows in March, Claims New ONS Data
Sector-wise numbers
The 14 sectors being surveyed by the Lloyds Bank UK Recovery Tracker are real estate, beverages & food, transportation, industrial services, chemicals, automobiles & auto parts, healthcare, household products, technology equipment, industrial goods, industrial services, software & services, tourism & recreation, and metals & mining. A recovery tracker reading above 50 indicates growth, while one below 50 suggests a contraction in the sectoral output.
While all the sectors had a tracker value above 50 for April, a reading of 51.9 for Britain’s tourism and recreation sector needs a special mention. The reason is that its economic activity grew for the first time since August 2020, driven by the re-opening of the restaurants and pubs for outdoor dining. Moreover, there was a jump in the forward bookings for the UK hospitality and travel as there were indications of further easing out of lockdown related restrictions.
Going forward, the UK manufacturing sector will need to fix the ongoing problem of supply chain bottlenecks for further growth, said the report.
While ‘industrial services’ was one of the best-performing sectors during April, ‘automotive manufacturing’ was the worst performing one.
Thirteen of the 14 sectors monitored (all barring real estate) recorded stronger business expectations than their global sector peers for the next one-year period, with consumer services leading the race for optimism with hopes for a sharp rebound in demand. In the previous month’s Lloyds tracker survey, this reading was a full 14 on 14. The report said that the main reason for this bright outlook was the success of Britain’s vaccination programme coupled with its economy’s re-opening roadmap out of the lockdown.
Also Read: UK Construction PMI Expands in April, Highest in Over 6 Years
