The UK economy showed stronger-than-expected growth in February 2024, expanding by 0.5% after a stagnant January, according to the latest Office for National Statistics (ONS) data. This rebound was driven by broad-based growth across key sectors, including services, production, and construction, alongside a narrowing trade deficit.
Key Highlights of UK Economic Growth in February 2024
- GDP growth of 0.5% in February, beating forecasts of 0.1%
- Services sector expanded by 0.3%, contributing significantly to economic recovery
- Production output surged by 1.5%, with manufacturing leading the gains
- Construction grew by 0.4%, recovering from a slight January dip
- Trade deficit narrowed to £1.0 billion, the lowest since mid-2021
Sector-by-Sector Breakdown
1. Services Sector Drives Economic Expansion
The UK services sector, which accounts for nearly 80% of GDP, grew by 0.3% in February, following a 0.1% increase in January. Over the three months to February, services output rose by 0.6%, reinforcing its role as the backbone of the economy.
2. Manufacturing and Production Output Rebounds
After a 0.5% decline in January, production output jumped 1.5% in February, with manufacturing being the primary growth driver. The three-month performance also improved, rising by 0.7%, signaling resilience in industrial activity.
3. Construction Sector Shows Modest Growth
Construction output increased by 0.4% in February, recovering from a 0.3% dip in January. However, the sector showed no growth over the three-month period, indicating ongoing challenges.
Trade Deficit Narrows to Near Three-Year Low
The UK trade deficit improved significantly, shrinking by £7.5 billion to just £1.0 billion in the three months to February—the smallest deficit since July 2021.
- Goods trade deficit narrowed by £3.5 billion to £55.0 billion
- Services trade surplus widened by £4.0 billion to £53.9 billion
- Exports to the US rose for the third straight month, up £500 million
Economic Outlook for 2024
The latest UK GDP growth figures suggest a resilient economy despite earlier stagnation. With the Bank of England monitoring inflation and interest rates, sustained growth in services and manufacturing could bolster economic stability in the coming months.
For more updates on the UK economy, GDP trends, and trade data, stay tuned to our latest reports.
