UK economy clawed back ground in February with construction sector driving 0.4% growth despite brutal lockdown – as EU exports surged back after post-Brexit slump
- The UK economy grew by 0.4 per cent in February according to latest figures
- The expansion came despite the brutal Covid lockdown rules still being in force
- GDP is still around 8 per cent lower than before the pandemic caused chaos
The official figures marked a recovery from the grim 2.2 per cent drop the previous month, with the construction sector driving the improvement.
However, the rebound was slightly below the expectations of some economists. And GDP is still around 8 per cent below the level it reached before coronavirus sent the world spiralling into chaos.
Meanwhile, separate trade figures suggested exports to the EU rose by nearly 50 per cent after their record fall in January, when the Brexit transition period ended.
An ONS spokesman said: ‘The economy showed some improvement in February after the large falls seen at the start of the year but remains around 8 per cent below its pre-pandemic level.
The official figures marked a recovery from the grim 2.2 per cent drop the previous month, with the construction sector driving the improvement
Exports to EU rebound after post-Brexit dive
Exports to the EU surged by almost 50 percent in February, after a record slump following the end of the Brexit transition period in January.
The value of UK goods sent to the bloc jumped by 46.6 per cent or £3.7billion, the Office for National Statistics said.
The figures had nosedived by a record 42 percent or £5.7billion in January.
The value of goods imported from the EU rose more modestly by 7.3 per cent or £1.2 billion, after a record fall of 29.7 percent or £6.7billion in January.
The ONS said: ‘Exports to the EU recovered significantly from their January fall, though still remain below 2020 levels.
‘However, imports from the EU are yet to significantly rebound, with a number of issues hampering trade.’
‘Wholesalers and retailers both saw sales pick up a little, while manufacturing improved with car producers experiencing a partial recovery from a poor January.
‘Construction grew strongly after revised figures showed they had struggled in the last couple of months.
‘Exports to the EU recovered significantly from their January fall, though still remain below 2020 levels. However, imports from the EU are yet to significantly rebound, with a number of issues hampering trade.’
The crucial service sector grew by 0.2 per cent in February, as wholesale and retail trade sales picked up slightly.
Manufacturing expanded by 1.3 per cent – but construction saw the biggest boost at 1.6 per cent.
The previous estimates of a 2.9 per cent fall in output in January were revised upwards, with the drop now thought to be 2.2 per cent.
Overall GDP in February was still 7.8 per cent below the level 12 months before.
Trade figures from the ONS showed exports of goods to the EU partially rebounded, increasing £3.7billion – or 46.6 per cent – after a record fall of £5.7billion in January.
Rory Macqueen, principal economist at the NIESR think-tank, said: ‘Despite little change in restrictions, a return to growth in February and upward revisions to January GDP mean that the contraction in the first quarter will be much smaller than anticipated.
‘Clearly much of the economy has adapted to cope with Covid-19 restrictions… ‘If the vaccine programme and lifting of restrictions continue on schedule this provides a firm basis for continuing growth in the second quarter and 2021 overall.’
Construction saw the strongest recovery in February, making a significant contribution to overall growth despite being a smaller sector