© 2020 – 2024 AEA3 WEB | AEAƎ United Kingdom News
AEA3 WEB | AEAƎ United Kingdom News
Image default
IT

COVID-19 news: UK sectors remain behind global benchmark but boosts after vaccine breakthrough

The UK’s economic recovery is slowly gaining momentum as the first effective coronavirus vaccine news boosts business optimism for 2021. However, the pace of the recovery remained behind the global benchmark in November, according to the latest Lloyds Bank UK Recovery Tracker. 

In collaboration with IHS Markit, the Recovery Tracker provides insight into the shape and pace of the UK’s recovery following the disruption caused by COVID-19.

As per the data, eight of the fourteen UK sectors were behind the global index during November, the same number as in October.

The tracker shows that the tourism and recreation businesses were furthest behind the equivalent global benchmark, with a reading of 15.6 against the global benchmark for the sector of 44.0 as the national lockdown in England came into force. 

It’s worth noting that, reading above 50 signals output is rising, while a reading below 50 indicates the output is contracting. 

UK outperformed the European benchmark

The report says the beverages and food sector (39.9) also fell further behind the equivalent global benchmark (52.4) in November, with producers citing a fall in orders from pubs and restaurants.

The real estate (40.6) and transportation (47.5) were the only other UK sectors to register an outright decline in output during November. 

While the UK overall remained behind the global benchmark in November, it still outperformed the European benchmark, with 12 of the 14 UK sectors. Only tourism and recreation and beverages and food were behind the European average.

National output fell for the first time

Moreover, the UK national output fell for the first time in five months during November (49.0). However, the fall was not as steep as the drop measured during the first national lockdown, claims the tracker. 

This is partly due to manufacturers being able to operate as normal during the latest series of lockdown measures across the UK. Domestic manufacturers outperformed services businesses for a ninth consecutive month in November. Metals and mining led the growth rankings for the third month running (70.7), with automobiles and auto parts in second place again (63.3).

Ten of the fourteen sectors monitored by the tracker saw overall output growth during November, with six recordings faster output growth month-on-month. 

The biggest uptick was seen among technology equipment manufacturers (61.3 vs 52.7 in October) and producers of household products (52.7 vs. 45.0 in October). 

The rise in UK technology equipment output mirrored a worldwide rebound in the sector during November, led by the recovery of the global semiconductors industry, which improved trade flows and boosted demand. 

Manufacturers indicated that rising output was partly driven by higher export orders in November, as European clients brought forward purchases before the end of the Brexit transition period. The 31 December deadline also caused stockpiling at factories for the first time since October 2019.

Coronavirus vaccine boosts optimism

While national output fell in November, news of the first effective coronavirus vaccine made UK companies more optimistic about the UK’s recovery in November. 

Almost two thirds (64%) of tourism and recreation firms and more than two fifths (43%) of real estate businesses predicted their output would rise in the next 12 months, up from 41% and 30% respectively in October.

The software and services sector also registered a large uptick in confidence month-on-month (69% anticipate growth vs 55% in October) and now has the most positive outlook for the next 12 months of all 14 sectors monitored by the Tracker, followed by healthcare (68% vs 63% in October). 

Jeavon Lolay, Head of Economics and Market Insight, Lloyds Bank Commercial Banking, says: “While the performance of UK services businesses has been acutely affected by the tightening of restrictions and national lockdown measures, there were also positive signs of resilience for the broader economy as a range of sectors reported stronger growth in November.” 

“The news of an effective vaccine saw business expectations improve markedly last month, potentially helping to reverse the fortunes of consumer-facing industries that have borne the brunt of COVID-19 restrictions.’

Ed Thurman, Managing Director, Global Transaction Banking, Lloyds Bank Commercial Banking, adds: “It’s encouraging to see news of a viable vaccine boost business confidence for the next 12 months. We are nearing the end of a year that has forced firms to dig deeper than ever before and lean on the resilience and innovation they have always shown in the face of adversity. The rollout of the vaccine will take time, and the path of the UK’s recovery from Covid-19 will continue to be determined by a far-reaching set of factors, including the end of the Brexit transition period on December 31st.” 

The post COVID-19 news: UK sectors remain behind global benchmark but boosts after vaccine breakthrough appeared first on UKTN (UK Tech News).

Related posts

NCSC exposes Russian cyber attacks on UK political processes

AEA3

MPs say Online Safety Bill fails to tackle full range of harms

AEA3

Walmart’s enterprise software: A Computer Weekly Downtime Upload podcast

AEA3