With the growth of UK economy owing to heightened demand and decrease in cost inflation, a reduction in pricing stress was experienced last month by the tourism and recreation sector which includes travel agencies, trip operators and related services.
According to Lloyds Bank’s UK Sector Tracker, a greater number of sectors in the UK reported a rise in production during February than in any other month over the past 10 months.
Out of the 14 sectors that the tracker monitored, 11 observed a growth in output in February, which is a significant increase from the six sectors that reported expansion in January. This is the largest number of sectors to see an upturn in production since April 2022.
The growth in production across various sectors was fueled by a rise in the number of new orders, with 10 out of the 14 sectors witnessing an expansion in their volume of new orders last month.
According to Lloyds Bank, the surge in demand was attributed to rising customer confidence, as weaker inflation boosted consumer expenditure. Moreover, the number of companies that associated lower orders with higher prices reduced by almost 50% on a month-on-month basis across the economy.
In addition, the rate of cost inflation for businesses decelerated in February, and out of the 14 sectors monitored, 12 of them reported a slower pace of cost inflation in comparison to the previous month.
Meanwhile, UK businesses hired more employees in February after a period of three months, but reports from some companies experiencing staffing shortages also increased.
During February, the number of companies mentioning backlogs of work caused by shortages in labor reached the highest level in eight months.
Jeavon Lolay, head of economics and market insight at Lloyds Bank Corporate and Institutional Banking, said: “February’s data underlines the economy’s relative robustness, and gives some reasons for optimism for the year ahead.
“While inflationary pressures are still acute and households continue to be cautious with spending, a healthy labour market is helping underpin confidence and demand.”