The pace of the 海角视频鈥檚 economic recovery from the coronavirus pandemic has slowed down with retail and tourism among the sectors falling behind as restrictions tightened, a new report shows.
The latest Lloyds Bank 海角视频 Recovery Tracker revealed the 海角视频鈥檚 economy lagged behind the global benchmark for the first time since June 2020, as consumer facing industries and their suppliers grappled with new restrictions and slowing demand.
Tourism and recreation, particularly important for the South West economy, fell sharply behind the global benchmark in October following the roll-out of various tiered lockdown measures around the 海角视频 and as new hospitality curfews and restrictions on social interaction were introduced.
The food and drink sector also fell sharply as a result, with producers experiencing a drop in orders from pubs and restaurants.
Beverages and food (43.5), household goods (45), technology equipment (52.7), chemicals (51.9), real estate (52.4) and banks (55.2) all dropped below the benchmark in October, while tourism and recreation (25.5) and transportation (43.6) both fell further behind. A reading above 50 signals output is rising, while a reading below 50 indicates output is contracting.
Overall the 海角视频 posted a reading of 52.1 (down from 56.5 in September), mirroring the economic slowdown seen across the rest of Europe amid the resurgence of Covid-19.
But metals and mining (70.3) was the most notable positive, maintaining its position as the 海角视频 sector furthest ahead of the global benchmark for the second month in a row.
海角视频 manufacturing firms outperformed services businesses for an eighth consecutive month in October, highlighting the disparity with consumer facing sectors, such as tourism and recreation, when it comes to restrictions on trade.
The best performing manufacturing sectors - metals and mining and automobiles and auto parts - were relatively unaffected by the new measures introduced in October, with many experiencing rising order numbers as international supply chain disruption continued to ease following the end of the Spring lockdown.
The metals and mining industry benefited from robust demand for raw materials from foreign manufacturers, posting the second-highest month-on-month jump in output growth (70.3 vs 67.3 in September).
Automobiles and auto parts (64.6 vs 62.2) registered the third-fastest acceleration as demand from Asian markets for European vehicles increased. In October, the China Association of Automobile Manufacturers reported a 12.5% increase in new vehicle sales year-on-year.
The 海角视频鈥檚 healthcare sector posted the highest month-on-month jump in output growth (59.4 in October vs 51.3 in September), partly reflecting increased activity across the healthcare supply chain due to Covid-19.
This category includes pharmaceutical manufacturing, production of medical equipment, research and development activities, and the provision of private healthcare services.
In fact, six of the 14 海角视频 sectors monitored by the Tracker saw output rise faster than the global index during October. However, this is five fewer than in September.
But almost a quarter (23%) of 海角视频 private sector companies that predicted their output will fall linked this to Brexit-related uncertainty, often raising concerns about the prospect of a no-deal outcome with the EU, compared with 15% on average during the third quarter.
The proportion of 海角视频 manufacturers and services businesses stating that Brexit uncertainty will have a negative impact on output rose since the third quarter.
Among manufacturers predicting lower output in the next 12 months, about 40% cited Brexit concerns in October, up from 20% during the third quarter.
The Tracker, complied through IHS Markit, provides unique insight into the shape and pace of the 海角视频鈥檚 recovery following the disruption caused by Covid-19.
Jeavon Lolay, head of economics and market insight, Lloyds Bank Commercial Banking, said: 鈥淭he October data shows that the 海角视频鈥檚 recovery was slowing after a strong economic rebound in the third quarter. At the sector-level, 11 of the sectors monitored by the tracker reported a weaker performance in October than during September.
鈥淭he 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.
鈥淚f, as hoped, a vaccination programme is rolled out, the 海角视频鈥檚 recovery should be revived and become more sustainable next year.鈥
Ed Thurman, managing director, Global Transaction Banking, Lloyds Bank Commercial Banking, added: 鈥淭he 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.
鈥淚t is still an incredibly challenging time. Navigating the road ahead will require businesses to draw on the resilience and innovation they鈥檝e shown since the pandemic first took hold.
鈥淲e鈥檒l continue to be by their side as they do so, providing the resources and guidance needed to help firms overcome challenges and capitalise on new opportunities as we work towards recovery.鈥
