The UK economy showed no growth in February, data from the Office for National Statistics (ONS) shows. Falls in activity in the services sector dragged down gross domestic product (GDP), which was largely offset by a boost in construction.
The figures came as widespread industrial action, including strikes by teachers and rail workers, continued to crimp activity. Finance minister Jeremy Hunt says the country is now on track to avoid recession — defined as two consecutive quarters of contraction.
Services Sector
The services sector showed no growth in February as the UK economy once again narrowly avoided a recession. Despite some growth in construction and retail, strike action by teachers and Civil Service workers pulled down the sector.
The service sector, also known as the tertiary sector, is one of three economic sectors in the three-sector model. Instead of producing tangible goods, it provides services such as information, attention, advice, access and experience.
It may also involve the transformation of non-tangible items, such as pest control or entertainment. The tertiary sector is often considered the most important part of an economy, as it represents a large share of the GDP.
The economy showed no growth in February, according to the Office for National Statistics (ONS). Despite growth in construction and retail, strike action by members of the Teachers’ and Civil Service Unions dragged down the sector.
Construction Sector
The UK economy showed no growth in February as wide-spread strike action dragged on growth in the services sector. The Office for National Statistics (ONS) reported that output in the economy rose by 0.0 per cent, lower than the 0.1 per cent growth that was expected.
However, the construction sector grew strongly, driven by new work and repairs. This helped the country avoid a recession for the first time this year, according to the ONS.
It is essential for the construction sector to find ways to boost productivity and create a better working environment for workers. This includes accelerating the onboarding of recruits and boosting retention by revisiting what employees want beyond wages.
The industry also needs to ensure that it is reducing its carbon footprint and contributing to the conservation of natural resources. This includes implementing sustainable construction practices on project sites, such as minimizing waste and promoting efficiency.
Manufacturing Sector
The UK economy showed no growth in February, with the manufacturing sector also showing no sign of recovery. Its output slipped by 0.2% in February, despite the manufacturing PMI rising to a three-month high of 58.0 from January’s 57.3.
The rise was mainly driven by faster growth of new orders and stocks of purchases, and lower supply chain disruptions. However, there was a slowing in job creation and higher rates of purchase price inflation and output charge inflation.
In the short term, manufacturing is facing challenges with a shortage of skilled labour and prolonged cost pressures. The manufacturing industry accounts for around a tenth of the UK economy.
Retail Sector
The retail sector is a large part of the UK economy and it has been facing a number of challenges in recent years. Lockdowns for non-essential shops, supply chain disruptions caused by the pandemic, high energy prices, business rates reducing profitability and a general shift in consumer patterns away from bricks and mortar shops to online shopping are all weighing on this industry.
According to the Office for National Statistics (ONS), sales in the UK retail sector rose by 1.2% in February, beating expectations. This was
driven by non-food stores – such as department stores and clothing stores – which saw strong growth.
Food store sales volumes were up by 0.9% month on month, despite stubbornly high food and drink prices. However, this increase was offset by declines in some other sub-sectors. Across the entire retail sector, non-food store sales volumes rose 2.4% on the month,
boosted by a 5.5% rise in department stores and a 2.9% surge in clothing stores.
