The latest UK GDP figures show signs of optimism with a modest return to growth.
Released by the Office of National Statistics (ONS) estimates for February GDP show GDP growth of 0.4%. This follows a drop of 2.2% in January 2021 and is still 7.8% below the figure in February 2020.
Commenting on the GDP figures, Geoff Mason, Policy Manager at the North & Western Lancashire Chamber of Commerce said:
“The return to growth is good news after a dip in January. However, February’s growth was modest in comparison and there is still a significant gap to where GDP was a year ago. It is especially welcome news that growth was seen across all sectors of the economy including services.
“As the economy starts to re-open it is expected that GDP will continue to grow. It is essential that the re-opening happens as planned and there are no further lockdowns or increased restrictions. The past year’s figures show how even limited restrictions can impact the recovery, so must be avoided if possible.
“While there is great hope of a large consumer bounce back over the next few months, this could be hampered if it goes along with business closures and job losses as government support is withdrawn. Support must retained, while being reduced where applicable, to ensure there aren’t closures and mass unemployment.
“While the signs may be promising, the vaccine programme, workplace testing and appropriate support are still crucial to a successful and safe recovery.”
The main points of the report are:
- UK gross domestic product (GDP) is estimated to have grown by 0.4% in February 2021, as government restrictions affecting economic activity remained broadly unchanged.
- The service sector grew by 0.2% in February 2021, as wholesale and retail trade sales picked up a little but, overall, consumer-facing services industries remain well below pre-pandemic (February 2020) levels.
- Output in the production sector grew by 1.0% in February 2021, as manufacturing grew 1.3% following contraction in January.
- The construction sector grew by 1.6% in February 2021, driven by growth in both new work and repair and maintenance.
- February’s GDP is 7.8% below the levels seen in February 2020, compared with 3.1% below the initial recovery peak in October 2020.
- Latest estimates show that January’s GDP fell by 2.2%, an upward revision from negative 2.9%.