Tourism and recreation saw the sharpest fall in consumer demand of any UK business sector in August, the latest Lloyds Bank UK Sector Tracker has revealed.
The number of sectors reporting a fall in demand increased for a fourth successive month to 11 out of the 14 which make up the tracker, reflecting the increasing economic pressures.
But tourism and recreation fared the worst as consumers reined in discretionary spending, with a tracker score of 38 in August when any reading below 50 indicates contraction.
The Lloyds Bank UK Sector Tracker is based on indices compiled from the responses of more than 1,500 companies.
The only sectors to see demand growth last month were technology, metals and mining.
Jeavon Lolay, head of economics and market insight at Lloyds Bank corporate and institutional banking, said: “Our tracker shows the slowdown in activity spread to more sectors of the UK economy in August.
“More tellingly, all 11 sectors that saw output fall last month also saw demand falter.”
He said: “While the government’s energy support package represents a crucial intervention for households and businesses, it is too early to tell whether this will turn the overall trend of the economy.”
Lolay noted: “Firms will be paying close attention to the new Chancellor’s plans for emergency support during the energy price crisis and his policies to boost growth.”
Chancellor Kwasi Kwarteng is due to unveil a ‘mini-budget’ on Friday of this week (September 23).
Scott Barton, managing director of Lloyds Bank corporate and institutional banking, added: “The cost of doing business remains extremely high, and firms continue to face a significant period of uncertainty.”
The Lloyds Bank UK Sector Tracker in July showed tourism and recreation recorded the highest margin pressures – the gap between input and output prices – of any sector, with transport suffering the second highest margin pressure.