Pace of economic recovery slows down
In the midst of lockdown measures, a quarter of businesses foresee Brexit-related anxiety affect their quarterly output.
Since the month of June, the UK was experiencing a significant speed of economic recovery. But the month of October has brought the pacing to a slower rate, falling behind the global benchmark.
This change of recovery pace may be caused by instituted pandemic restrictions that are hindering the growth of certain industries and businesses.
Amid the resurgence of the virus, the UK's recovery track has a reading of 52.1. In September, it was at 56.5 in rate. The numbers were furnished by the Bank of Scotland and their Recovery Tracker.
The tracker has monitored 14 sectors of the UK. It has reported that before October, six sectors showed healthy recovery but by the end, it has dropped below the benchmark.
The sectors are:
· Beverages and food (43.5)
· Household goods (45)
· Technology equipment (52.7)
· Chemicals (51.9)
· Real Estate (52.4)
· Banks (55.2)
· Tourism (25.5)
· Transportation (43.6)
Tourism and recreation fell behind the global benchmark after announcements of lockdown measures and tiered lockdown schemes. Policies such as curfews and face-to-face restrictions have set back the industry.
As a result, beverages and food have also fallen sharply behind. Producers and suppliers from the sectors have reported a decline in orders from restaurants, cafes and pubs.
The better performing sector that seems to be untouched by the events is manufacturing sectors, metals, mining, auto parts, and automobile parts. Many of these industries have also experienced a rise in order of numbers due to the disruption of outsourced international supply.
Metals and mining have a recovery rate of (70.3) outperforming service businesses for an eighth consecutive month.
The health sector, on the other hand, is showing a steady output of growth. Comments credit the increased activity across the healthcare supply chain due to the pandemic. In September, the rate was at 51.3, in October it bumped up to 59.4 in recovery rate.
The healthcare sector includes medical equipment (production and procurement), pharmaceutical manufacturing, and private healthcare services.
Several Lloyds Bank Commercial Banking representatives expressed their expert comments on the matter.
Head of Economic and Market Insight, Jeavon Lolay, said: "The October data shows that the UK's recovery was slowing after a strong economic rebound in the third quarter. At the sector-level, eleven of the sectors monitored by the tracker reported a weaker performance in October than during September.
"The restrictions facing many businesses last month are now being compounded by various lockdown measures. However, while near term growth prospects will continue to be determined by the path of the virus and the extent of restrictions to control its spread, news of potentially viable vaccines is an encouraging development. If, as hoped, a vaccination programme is rolled out, the UK's recovery should be revived and become more sustainable next year."
Meanwhile, Ed Thurman, Managing Director, said: "The recent performance of manufacturers is welcomed, but our latest data underlines the impact restrictions are having in sectors that rely on the social interaction and freedom of movement we used to take for granted.
It is still an incredibly challenging time - navigating the road ahead will require businesses to draw on the resilience and innovation they've shown since the pandemic first took hold."
