Tourism and recreation joined 12 other UK sectors that are outperforming their international counterparts on a series of metrics tracking recovery from Covid-19 in August, according to Lloyds Bank.
The Lloyds Bank UK Recovery Tracker, working with IHS Markit, provides unique insight into the shape and pace of the UK’s recovery following the unprecedented disruption caused by Covid-19. The output of UK businesses in 13 of the 14 sectors monitored by the tracker increased in August, up from 12 sectors in July as tourism and recreation returned to growth for the first time since February.
The sector, which includes hotels, restaurants and leisure facilities, posted a PMI reading of 60 August, up from 45 in July. A reading of above 50 signals output is rising, while a reading below 50 indicates output is falling. Restaurants reported support from the government’s Eat Out to Help Out scheme, which ended in September, and businesses that focus on domestic tourism reported a benefit from an increase in people taking staycations.
Tourism and recreation joined automobiles and auto parts (77) and healthcare (71) as the sectors furthest ahead of global benchmarks during August.
While the vast majority of UK sectors outperformed their international counterparts in August, this should be viewed in the context of the historic lows recorded during the second quarter of 2020. All 14 UK sectors monitored by the tracker underperformed against the global benchmark in April. Many tourism and recreation businesses only started to operate again in July, which helped make the sector’s August rebound in output so sharp.
Travel restrictions and the continued use of work-from-home policies by businesses meant transport (44) was the only sector to fall behind the global benchmark of recovery in August and register an outright decline in output.
Jeavon Lolay, head of economics and market insight in Lloyds Bank Commercial Banking, said: “The headline findings of this month’s UK Recovery Tracker paint a positive picture, with more domestic businesses outperforming their international counterparts during August. It will be interesting to see the picture in September when the Eat Out to Help Out scheme has ended and the impact of the ‘rule of six’ on sectors that rely on social interaction, such as tourism and recreation, is clearer.”