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Latest Lloyds UK sector tracker reveals more sectors grew in February


20 March 2025

  • Four out of 14 UK sectors said output grew in February – three more than in January and the most since November 
  • The number of sectors seeing demand rise month-on-month (as measured by new orders) was unchanged (two) 
  • Every sector raised prices for the first time in seven months, as most sectors see cost pressures increase

 

The latest Lloyds UK Sector Tracker, compiled using exclusive PMI survey data from around 1,300 private sector companies, reveals that more sectors reported month-on-month growth in February.

Four sectors saw output rise (up from one in January) – the most since November 2024. Software & IT services grew at the fastest pace (58.7), and the tourism and recreation sector – which includes pubs, hotels and restaurants – expanded for the first time in ten months (50.4).

Meanwhile, the data shows that month-on-month, demand – as measured by new orders – remained broadly similar, with two sectors reporting a rise. Software services saw demand growth for the 24th month in a row. 12 sectors saw demand, as measured by new orders, fall. 

Businesses focus on cost cutting, as cost pressures remain

In February, most sectors reported a month-on-month increase in cost pressures (nine). 

Against this background, all seven manufacturing sectors monitored by the Tracker cut back on their purchases of raw materials for a third month in a row, while the number of businesses mentioning that headcounts had been lowered – as part of efforts to manage costs – marginally increased to 3.3 times the long-run average (vs. 3.06 in January and 3.68 in December 2024). 

For the first time in seven months, every sector increased the prices charged to customers, although seven sectors did so at a slower rate than in January. 

Nikesh Sawjani, Senior UK Economist at Lloyds, said: “The month-on-month rise in the number of growing sectors is movement in the right direction, as it demonstrates the work that firms are doing to counter the challenges they continue to face. However, February marked the sixth month in a row where more than half of the monitored sectors saw output contract. Although uncertainty remains within sectors, businesses are no longer absorbing as much impact – instead, they are taking steps to protect their margins.”

 

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