Bank of Scotland says tourism and transport rebound strengthened in May
Tourism, leisure and transport businesses across the UK – some of the hardest hit by Covid-19 – saw the strongest monthly output growth of any industry in May, new figures show.
The Bank of Scotland’s (B0S) latest UK Recovery Tracker has 11 of 14 sectors reporting faster production growth last month, up from nine in April, as Covid-19 restrictions eased.
Consumer demand is driving the UK’s economic recovery forward.
Scott Barton, Lloyds Bank Commercial Bank
Companies in the tourism and leisure sector saw the largest increase – to 62.4, from 51.9 in April, with any figure above 50% signaling growth – as hotels, pubs and restaurants in Britain benefited from a release of pent-up consumer demand. .
The transportation sector – which includes bus and rail operators, as well as logistics services – delivered a reading of 63.2 last month, up from 53.5 in April.
Production in all sectors monitored by the tracker increased for the second consecutive month in May.
But healthcare growth slowed to 52.5 from 58.5, making it the worst performing sector monitored by the tracker for the first time since April 2019.
Job creation has reached pre-pandemic levels, according to the BoS, with all 14 sectors seeing workforce growth in May and the tourism and leisure sector recruiting for the first time since January 2020.
Manufacturers reported the highest rate of job creation, with companies increasing their workforce to meet growing international demand for goods.
Every industry reported a sharp increase in input costs in May, with the inflation rate for manufacturers hitting a 29-year high.
All 14 sectors increased their prices in May, with chemicals, metals and mining producers raising their tariffs the most.
The most affected sectors overtake the others
Jeavon Lolay, Head of Economics and Market Intelligence, Lloyds Bank Commercial Banking (LBCB), part of BoS’s parent company, Lloyds Banking Group, said: “When we look at the pace of growth, sectors that were hit hard by Covid-19 restrictions are now overtaking sectors that were able to operate more freely during the lockdown.
“It is undeniable that the economy is now on a much more solid footing.”
Scott Barton, Managing Director of Corporate and Institutional Coverage, LBCB, added: “The May results show that consumer demand is driving the UK’s economic recovery forward.
“It is particularly encouraging to see the performance of tourism and leisure businesses improve again.
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