Aerial View from London Eye, London, England. Photo: Getty
All 14 sectors monitored by Lloyds Bank UK Recovery Tracker reported output growth in April for the first time since August 2018, as lockdown restrictions in the country ease.
This was up from 11 sectors a month prior.
Jeavon Lolay, head of economics and market insight at Lloyds Bank (LLOY.L) Commercial Banking, said on Wednesday: “The UK’s recovery seems to have moved into the fast lane. The latest lifting of lockdown restrictions will only fuel a further boost to the already rapid pace of expansion at the start of this quarter.”
The output of UK tourism and recreation (51.9) businesses rose for the first time since August 2020, following the reopening of outdoor dining at pubs and restaurants.
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A reading above 50 signals output is rising, while a reading below 50 indicates output is contracting.
Hospitality businesses saw a spike in forward bookings in anticipation of lockdown measures easing further.
“It is particularly promising to see the tourism and leisure sector returning to growth after such a significant period of time,” said Scott Barton, managing director, corporate and institutional coverage, Lloyds Bank Commercial Banking.
“Consumer-facing businesses like pubs and restaurants have borne the brunt of COVID-19 restrictions, and will also be hopeful that the reopening continues as planned.”
The real estate sector also returned to growth as firms benefited from offices reopening and favourable conditions in the residential property market.
Manufacturers of technology equipment and metals and mining products recorded the strongest output growth for the second month in a row during April.
Technology equipment manufacturers – which includes producers of parts of smart devices, motor vehicles, computers and industrial machinery – continued to benefit from high international demand for components.
Manufacturers of metals and mining products did well thanks to global raw materials shortages and surging commodity prices.
Industrial services was the best-performing UK services sector in April.
This was due to corporate spending on projects that had been delayed during lockdown and demand for business services in support of new investment initiatives.
Automotive manufacturing was the worst performing sector, as firms continued to struggle with semiconductor shortages and some overseas customers choosing to buy from EU suppliers post-Brexit.
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For 13 of the 14 UK sectors monitored, readings for anticipated output growth over the next 12 months were higher than their global peers.
This was because “the UK’s progress out of lockdown and COVID-19 vaccination programme continued to outpace other countries,” the report said.
Only real estate was behind the global index by this measure, largely due to offices in the US services sector reopening at a faster pace than the UK.
“It’s no surprise that business optimism for the year ahead is strongest in consumer services on hopes that the re-opening of the economy will lead to a sharp rebound in demand,” said Lolay.
“However, it will also be very interesting to see how UK manufacturers address ongoing supply chain strains as concerns about inflation continue to build,” he added.
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