GDP grew 0.4 per cent in August, as Brits rush to eat out and return to theme parks
Gross domestic product (GDP) grew 0.4 per cent in August 2021, according to the latest figures, remaining 0.8 per cent below its pre-pandemic level.
The sectors offering the “strongest contribution”, according to the Office for National Statistics (ONS), were accommodation and food services, which boosted GDP 0.28 per cent.
Sports and recreation industries have also recovered well since emergency Covid-19 restrictions closed them off to the public for more than a year.
Both have now risen above pre-pandemic levels, as Brits rushed to theme parks during the summer holidays and football fans returned to stadiums.
Chancellor of the Exchequer, Rishi Sunak said: “Our economic recovery is continuing with more employees on payrolls than ever before and the UK forecast to have the fastest growth in the G7 this year.
“As we rebuild from the pandemic, we are taking action to ensure our economy remains strong by helping people find great work through our Plan for Jobs.”
Supply chain ‘triple whammy’
UK production rose by 0.8 per cent between July and August, remaining 1.3 per cent below its February 2020 level.
While services output led the GDP growth, output in consumer-facing services lifted by 1.2 per cent, the ONS found.
All other services rose by 0.1 per cent, pushing other services to be 0.4 per cent above their pre-pandemic levels, while consumer-facing services remain 4.7 per cent below as the UK wrestles with supply chain issues.
The country’s construction output contracted, tumbling 0.2 per cent in August, meaning the sector is now 1.5 per cent levels seen in February last year.
Managing Director of property and construction consultancy McBains, Clive Docwra, said: “Today’s figures are proof that the construction sector is in a downward spiral, as this is the fifth successive monthly fall in output.
“New work remains flat in due in large part to a continuing shortage of essential products such as steel, concrete and timber. Steel prices in particular are now almost 75 per cent higher than they were in August 2020.”
Dowara cautioned that the rest of the year “looks ominous” too, as a string of shortages hamper the country’s efforts to rebuild its production output.
“The triple whammy of continuing supply chain issues, together with a lack of HGV drivers to deliver the materials that are available, means some developments being delayed, and the fuel and energy crisis is also likely to add to project costs.
“Skills shortages are also a concern, so the government should grant an exemption allowing skilled foreign construction workers to apply for work visas, as they did to address the shortage of HGV drivers.”
TheONS has since revised its forecast for GDP growth in July – switching from 0.1 per cent growth to a 0.1 per cent fall.