Hospitality slowest sector to regain pre-pandemic levels
The hospitality sector will take over a year longer to recover to its pre-pandemic size than the wider economy, the British Chambers of Commerce says.
In a report published today, the BCC said that the economy would return to its pre-Covid-19 size by the first quarter of next year but warned that the hospitality sector would not recover until the second quarter of 2023.
Other sectors will rebound more quickly. The BCC said manufacturing, which has weathered the lockdowns better than services, would recover to its pre-crisis size by the end of this year.
It is less optimistic than the Bank of England, which expects the economy to recover by the final quarter of this year, after growing by 7.25 per cent, its fastest since the Second World War.
The BCC said that the economy would expand by 6.8 per cent this year, assuming the government sticks to its road map for reopening the economy.
Consumer spending is likely to be the main driver of the economic rebound.
“The release of pent-up demand if restrictions ease as currently planned and the rapid vaccine rollout is forecast to drive the strongest growth in spending since 1988, as consumers spend some of their unanticipated savings accumulated during lockdowns,” the report said.
“Despite the immediate boost to UK GDP, our latest outlook projects an uneven recovery. Output from catering and hospitality are forecast to return to pre-pandemic levels in Q2 2023.”
Hannah Essex, an executive director at the BCC, said: “The UK economy, and the business communities that drive it, are showing their propensity to bounce back from a crisis. Historic levels of growth for this year are predicted, a testament to the flexibility and innovation shown by businesses and the resilience of consumers.”