Number of growing UK sectors holds steady, despite uncertainty
The number of growing UK sectors held steady in March, according to the latest Lloyds UK Sector Tracker.
Compiled using exclusive PMI survey data from around 1,300 private sector companies (between 12 – 27 March), the report shows that four sectors saw output growth, the same number as in February.
Real estate services expanded for the first time this year, with firms citing a flurry of property purchases ahead of changes to Stamp Duty coming into force on 1 April. The other sectors reporting growth in March include food and drink manufacturing, software services and financial services.
While overall services reported an uptick in growth in March – due to rising demand in the financial services and software sectors – UK goods production fell. Six out of its seven manufacturing sectors monitored by the Tracker saw a drop in output.
Cost pressures
The number of sectors reporting increased cost pressures (such as materials and wages) rose marginally month-on-month (10 in March versus nine in February), and although the UK Composite PMI survey’s overall measure of cost inflation fell (63.6), it remained slightly above its 2024 average (60.7).
As businesses continue to find ways to drive efficiency gains, seven of the fourteen monitored sectors increased their prices charged at a faster rate in March. Tourism and recreation, technology equipment, chemicals, and food and drink manufacturing reported the highest increases, largely due to materials and wages costs.
The performance of the growing sectors monitored by the Tracker helped to drive the Composite PMI reading for the UK economy up slightly in March to 51.5 (versus 50.5 in February). A reading on the Tracker above 50.0 indicates expansion, while a reading below 50.0 indicates contraction.
Nikesh Sawjani, senior UK economist at Lloyds said: “Amid ongoing geopolitical and macro-economic challenges, the number of sectors reporting month-on-month growth held steady at four. The fact that this has risen from one since the start of the year illustrates the hard work that businesses in all 14 sectors – including those who did not report growth this month – are doing to drive efficiencies, protect their bottom line, and safeguard customer loyalty.”