Eight out of 14 UK sectors saw output grow in June, according to latest data from the Lloyds Bank UK Sector Tracker.
While this was three fewer than in May (11), when the Tracker reported “a 15-month high when the economy moved back into growth mode, June was the first time since 2022 that more than half of UK sectors had been growing for six months in a row,” the update from Lloyds Bank noted.
In addition, eight sectors saw demand, “as measured by new orders, rise – just one fewer than in May (nine).”
However, food and drink manufacturing “saw demand increase at the fastest pace of any sector monitored (60.3 vs. 52.3), driven by higher customer numbers. A reading on the Tracker above 50.0 indicates expansion, while a reading below 50.0 indicates contraction.”
In June, Lloyds Bank pointed out that “manufacturing output (53.3 vs. 53.4 in May) grew faster than services (52.1 vs. 52.9) for a second month in a row, with the biggest lead over services since January 2021.”
Similar to May, growth in manufacturing was once again driven by food and drink producers.
Notably, three out of the “seven monitored manufacturing sectors – metals and mining (59.1), chemicals (53.1) and food and drink (52.4) – also reported a rise in employment, the most since November 2023.”
Meanwhile, Lloyds Bank noted that “the Tracker’s ratio of manufacturers’ new orders to finished goods reached a 30-month high (1.13 times the long-run average), indicating that firms had more orders than they could meet with what they already had in stock.”
Nikesh Sawjani, Senior UK Economist, Lloyds Bank, said:
“While fewer sectors saw output growth in June, this was still more than half of UK sectors for the sixth consecutive month, indicating some resilience within the economy and sectors. Not since early 2022, when the country was coming out of lockdown, have we had a consistent broad base of growth across the UK economy, for such an extended period of time.”
Dave Atkinson, UK Head of Manufacturing, SME & Mid-Corporates, Lloyds Bank, said:
“The Tracker’s data suggests that manufacturers are now benefitting from a mix of growing demand and rising output which, if utilised well, will be crucial to maintaining growth going forward. Key to this will be effectively managing working capital alongside the availability of cash or finance to make any investments they need to support the growth – whether that’s to hire new staff, increase volumes of raw materials or additional plant within their factories.”
