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Highlights:
- Output demand growth registered a fall last month due to inflationary pressures.
- Of the 14 sectors monitored, 11 reported a fall in demand, while just three witnessed a rise.
Amid the rising inflation, people are cutting down on non-essential expenses. As a result, most businesses have reported a fall in demand in recent months, resulting in most sectors reporting slower output growth.
The latest data from the Lloyds Bank UK Sector Tracker shows that several UK sectors witnessed a decline in demand for the fourth month in August. This comes even as the rise in material and logistics costs was down to its slowest pace since September 2021, bringing overall inflation down from 78.4 in July to 76.6 last month.
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The tracker, which monitored 14 sectors, showed that 11 reported a fall in demand. Among them, the tourism and recreation sector, which includes hotels, restaurants, pubs, and leisure facilities, registered the fastest drop in demand, falling from 42.3 in July to 38.0 in August. This decline can be attributed to the high inflationary pressures that have forced people to cut down on discretionary spending.
Only three sectors - technology equipment manufacturers, software services providers, and metals and mining companies, witnessed a rise in demand and output.
In the wake of this information, let’s look at the performance of a few London-listed stocks.
Whitbread Plc (LON: WTB)
Whitbread is a leading hospitality company in the UK and owns the popular hotel chain Premier Inn. The stock price has witnessed a downward trend in the past few months. Over the past 52 weeks, it has tumbled by nearly 20%, and the year-to-date return is also in the negative territory at -12.82%. As of 21 September 2022, the company holds a market cap of £5,315.36 million. It currently has an EPS of 0.21.
Softcat Plc (LON: SCT)
The value-added IT infrastructure solutions provider offers services like cloud services, software licensing, workplace technology, etc., in the UK and is a constituent of the FTSE 250 index. The company holds a market cap of £2,358.40 million, and its EPS is currently at 0.48. Over the past year, its share price has slipped by more than 46%, while on a year-to-date basis, the price has tumbled by over 34%.
Antofagasta Plc (LON: ANTO)
The market cap of the UK-based copper mining and exploration company stood at £11,174.69 million as of 21 September. Shares of the FTSE 100-listed firm have fallen by over 17% over the last one year, while the year-to-date returns are placed at -16.47%. The stock has an EPS of 1.31.
Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.
