Continuing the positive trend, the UK economy overall grew by 0.3% in November 2024, a figure well above analysts’ expectations of just 0.1%. This expansion comes on the heels of a 0.1% decrease in October. That indicates a promising rebound as different industries begin to make a comeback after struggling through several months of impacts from the COVID-19 pandemic. The services sector played a huge role in driving this development. Simultaneously, car production experienced an extraordinary boom – with Jaguar Land Rover (JLR) spearheading the recovery.
In November, JLR announced a stunning 25.5% growth in motor vehicle production. That increase sequel after the firm’s creation was brought to a stop by a cyber-attack in Sept 2024. Following the fire, JLR took successful steps to restart production in phases from October. This sector’s remarkable restart added further momentum to the economy’s impressive growth in November.
While this is very encouraging news, it’s not the case for every sector. The construction industry experienced a drop in output, decreasing by 1.3% from November. This decline represents the biggest consecutive three-month decrease for the industry in almost three years. Economists point to unseasonably wet weather which disrupted construction activity in the month as a primary cause. Most experts are predicting a recovery in construction output by December 2024.
That was almost entirely offset by a contraction of 0.1% across the whole UK economy in the three months to November. This chart depicts the swings in month to month GDP data compared to rolling three-month averages. While November’s growth is certainly an encouraging sign, the economic landscape continues to be vulnerable.
Economists are wary about what lies ahead for the economy’s trajectory and expect that growth will moderate going forward. Shadow Chancellor Mel Stride commented on the current economic conditions, stating, “The chancellor promised growth as her number one mission, but a failure to grip the benefits bills – and instead putting up taxes – is weighing heavily on business and the economy.”
This patchy performance between the sectors reflects how complicated the UK’s economic recovery has become. As much as there are silver linings found, there are clouds with big storms still brewing at places that may deflate overall optimism in the months ahead.