How did the UK’s main sectors fare after Covid measures were lifted in July?

Production was main contributor to July GDP growth, but legal activities fell by 7.3% during the month

  • UK economic recovery stalled in July amid worker shortages

Last modified on Fri 10 Sep 2021 10.39 EDT

The UK’s economic recovery from the pandemic stumbled in July, even as most Covid restrictions were lifted. Monthly growth was the weakest since January, when the UK was in lockdown.

Services

The services sector, which accounts for more than three-quarters of the UK economy, failed to register any growth during July, and remains below levels before the pandemic in February 2020, according to data from the Office for National Statistics (ONS).

Retail sales slumped by 2.5%, which was blamed on bad weather keeping consumers at home, as well as a surge in coronavirus infections, which caused the “pingdemic”, where hundreds of thousands of people were ordered to stay at home by the NHS app, and led to the temporary closure of some outlets.

Meanwhile, legal activities fell by 7.3% during the month, and real estate activities on a fee or contract basis tumbled by more than 10%, after house buyers rushed to complete their house sales and purchases before the partial end of the stamp duty holiday in England and Northern Ireland at the end of June.

However, arts, entertainment and recreation activity surged by 9% during the month, boosted by spending at sports clubs, amusement parks and festivals, as social distancing restrictions were eased in England from 19 July.

Production

The resumption of production at an oilfield, after a temporary closure for planned maintenance, boosted output from the production sector. It rose by 1.2% and was the main contributor to July GDP growth.

Construction

Output in the construction sector sank by 1.6% in July, marking the fourth consecutive quarter of falls. There was less new construction work and less repair and maintenance work.

The ONS said that anecdotal evidence from businesses showed that delays in the availability of construction materials – including steel, concrete, timber and glass – were the main reason for the decline in work.

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