The UK’s fastest growing sectors?

Date: 10-09-2015

Tagged as: ArticleGameplanEconomic ResearchGrowth

 

With the British economy now back in recovery, growth objectives are now firmly back on the business agenda. A look at the top 10 fastest growing industries by annual percentage change in output to Q1 2015 shows just where those ambitions are gathering real momentum, as identified by the Lloyds Bank Economic Research team.

combined graphicThe top three

1st – CHEMICAL MANUFACTURING

31% GROWTH

The UK is one of the world's top chemical producing nations, with a high performing industry achieving outstanding levels of growth, exports, productivity performance and international investment.1 Chemical manufacturing in this case refers to what is known as 'other chemical products' and covers a range of products primarily used as inputs into other industries. Examples include glues, photographic chemical materials and explosives. This is a growing segment of the wider chemicals industry, and, furthermore, a positive indicator of the strength of the industries it supplies.

2nd – SHIP BUILDING

16% GROWTH

There has been significant growth in the short-term in this sector, which may be due to the provision of new contracts from the Royal Navy, including the production of six Type 45 Destroyers and the two Queen Elizabeth Class aircraft carriers.2

3rd – AEROSPACE PRODUCTION

11.5% GROWTH

The UK aerospace sector is growing several times faster than the UK economy, directly employing 109,100 individuals, 3,300 of which are apprentices and trainees.3 Its success has been accredited largely to investment by government and industry in developing new technology and skills.4

The rest of the top 10:

4th – Furniture Production

5th – Information Services

6th – Nannies, Cleaners etc

7th – Hotels etc

8th – Land Transport

9th – Computer Programming and Consultancy Services

10th – Other Mining and Quarrying

Summary

Looking at the broad picture, UK manufacturing output has grown more slowly than the UK economy as a whole over the past 12 months, which may reflect tepid export growth. Services have been the primary driver of growth.

The presence of 'Hotels' and 'Nannies, Cleaners' in the top 10 highlight growing confidence in economic recovery and growth amongst both businesses and consumers. This reflects the findings of Lloyds Banks' latest Business in Britain report, which shows business confidence holding steady: at 43% the average of the net balances of expected sales, orders and profits was unchanged between the January and July results.5

The diversity reflected in the top ten is an encouraging sign of robust recovery, a trend it is hoped will continue long-term.

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