In August 2024, the UK economy recorded a 0.2% month-over-month growth, marking a return to expansion after stagnant growth in both June and July. This growth was in line with market expectations and reflects a balanced recovery across key sectors, including services, production, and construction.

Services Sector Performance

The services sector, which represents the largest part of the UK economy, saw a modest growth of 0.1% in August. While overall growth was slight, several key industries experienced significant gains:

• Accounting services increased by 4.3%, showing strong demand for financial services.
• Legal activities grew by 1.7%, reflecting continued activity in legal and corporate sectors.
• Scientific research expanded by 2.8%, contributing to the positive momentum in services.

However, the gains were offset by a decline in wholesale trade, which fell by 1.2%.

Rebound in the Production Sector

The production sector saw a more robust recovery, with output increasing by 0.5%. This rebound was driven by:

• A 1.1% rise in manufacturing, with particularly strong growth in motor vehicle production (+3.6%) and metal products (+2.3%).
• Water supply, utilities, and waste management also contributed positively to the sector’s growth.

However, not all areas within production showed positive results, as mining and quarrying declined by 4%, limiting the sector’s overall growth potential.

Construction Sector Growth

The construction sector continued its upward trend, expanding by 0.4% in August. The growth was primarily driven by new work, which increased by 1.6%. This reflects sustained demand in infrastructure and residential projects, contributing to the sector’s stability.

Three-Month Economic Growth

Looking at a broader perspective, the UK economy grew by 0.2% over the three months leading to August. This steady growth indicates a gradual recovery, with key industries such as manufacturing and construction driving the momentum, while challenges remain in sectors like mining and wholesale trade.

Economic Outlook for the UK

The return to growth in August 2024 signals a positive turn for the UK economy after months of stagnation. The strong performance in manufacturing, services, and construction points to a more balanced recovery. However, the overall economic outlook will depend on how external factors such as global demand and inflation evolve in the coming months.

In conclusion, the UK economy’s 0.2% growth in August reflects resilience across key sectors, with the services, production, and construction industries leading the way. While challenges remain, the steady expansion offers a more optimistic outlook for the UK as it moves into the latter part of the year.