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Number of growing sectors highest in 15 months

Lloyds Banking Group logo


18 June 2024

  • 11 out of 14 sectors reported output growth in May, despite overall rate of output growth easing.
  • Demand grew in nine sectors – the most since February 2023.
  • Manufacturing output growth overtakes services for the first time in more than two years, as activity and demand growth spreads across goods producers.


More parts of the UK economy grew in May than at any time in the last 15 months, according to the latest Lloyds Bank UK Sector Tracker. 

While the overall rate of output growth across the economy slowed marginally in May (53.0 vs. 54.1 in April), 11 out of the 14 UK sectors monitored by the Tracker reported output growth – up from eight in April and the most since February 2023. 

Real estate saw output rise at the fastest pace (58.9 in May vs. 51.6 in April), followed by chemicals manufacturing (58.7 vs. 48.6). A reading on the Tracker above 50.0 indicates expansion, while a reading below 50.0 indicates contraction. 

Broader growth was driven by more sectors experiencing rising demand. In May, nine sectors saw demand, as measured by new orders, increase. This was two more than in April (seven) and the highest number since February 2023. Chemicals manufacturers saw new order volumes expand at the fastest pace of any sector monitored (58.5 in May vs. 48.6 in April).

Manufacturing overtakes services, as growth and demand spreads  

In May, the pace of the overall manufacturing sector’s output growth overtook services for the first time since January 2022 (53.4 for manufacturing vs. 52.9 for services). 

The Tracker’s exclusive PMI data reveals that this was underpinned by a broadening of both output and demand growth in sub-sectors across manufacturing. 

In May, five of the seven manufacturing sectors monitored by the Tracker saw output expand, up from three in April. Meanwhile, four  saw demand grow (from two), as measured by new order volumes. The increase in both demand and output was the most that the sector has reported since February 2023.  

Looking ahead, the number of manufacturers expecting output to be higher in a year’s time was the most in 27 months. Producers also increased stocks of inputs for the first time in almost two years.

Nikesh Sawjani, Senior UK Economist, Lloyds Bank, said: “Having not grown in April, our latest UK Sector Tracker suggests that the economy moved back into growth mode in May. Our sector-level insight showed that growth broadened out to more parts of the economy – it’s no longer concentrated in just one or two particularly fast-growing sectors.”

Dave Atkinson, UK Head of Manufacturing, SME & Mid-Corporates, Lloyds Bank, said: “We’re seeing broader manufacturing output growth reflected in stronger demand for our specialist products like hire purchase and leasing to fund new plant and machinery and more requests to support with decarbonisation initiatives. 

“While building larger input inventories can help firms to quickly capitalise on further growth opportunities and weather any supply chain challenges during growth, it can also put pressure on working capital. Management teams will need to keep this in mind as they continue to plan their strategies.”

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