UK Business Insights: The Fastest Growing Sectors of 2021
The world of business can change within the blink of an eye. It doesn’t matter which sector you are in, each year brings a new set of challenges to overcome. In 2021, for example, the number of private sector businesses decreased by 6.5 per cent from the previous year. The loss of 389,600 businesses is a devastating loss for the wider economy, never mind the entrepreneurs starting them.
Despite this, more and more people are starting business. In the UK, almost 13 per cent of adults have done this within the past three months, or are already running a relatively new business. This is a 5 per cent increase from the previous year, which can be accredited to people feeling overworked during the highest points of the pandemic. Indeed, in the last year alone, almost one in four workers wanted to leave their professional role.
If ‘the Great Resignation’ of 2021 is encouraging workers to become entrepreneurs, which sectors would be the best to enter? Here, we explore the fastest growing business sectors within the UK, using data provided by the government.
1. Accommodation and food services
Accommodation and food services are one of the fastest growing sectors. This might come as a surprise considering consumer spending decreased during the pandemic. In fact, in May 2021, consumer spending only equalled 70 per cent of pre-pandemic spending.
The easing of restrictions, however, marked a return to normality and an increase in trade. Overall, the sector grew by 3.3 per cent in 2021. This is 0.3 per cent rise from the previous year, showcasing the rewards of perseverance in business. The ‘Eat Out to Help Out’ scheme, which boosted sales by 34 per cent during August 2020, can also be credited with this success.
2. Wholesale and retail trade of motor vehicles
The wholesale and retail trade of motor vehicles is the trading of any motor vehicles in retail, at auctions, and online. During the pandemic, travel restrictions meant the general public relied less on their cars, and the industry experienced a decline of 0.5 per cent.
In 2021, however, 6.4 million people were considering buying a car as lockdown and restrictions began to ease. This shift in consumer behaviours culminated in the motor vehicle sector increasing by 5 per cent. The industry, an example of success in the right circumstance, is ideal for budding entrepreneurs.
3. Wholesale
Wholesalers buy goods from a manufacturer, selling these in small quantities to traders. This can encompass a number of items, from commercial slush machines to premium pet food. The business sector is actually the third fastest growing in the nation, expanding by 5.3 per cent in 2021.
In the previous year, however, the wholesale sector reduced by 1.8 per cent. This is no doubt attributed to supply chain disruptions and shortages. Fast forward to recent months, and there is certainly a market for up-and-coming wholesalers, should entrepreneurs wish to start this business.
4. Retail
The pandemic changed the fabric of the retail sector as we know it. In 2020, total sales fell by 1.9 per cent from the previous year. At the same time, online retail sales reached a record high, accounting for 33.9 per cent of sales for the whole sector. This turbulence meant that the total number of businesses in this sector stagnated, neither rising nor falling.
A lot has changed since then. In 2021, the retail sector grew by 5.7 per cent, welcoming a plethora of new businesses. And as of January 2022, retail sales increased by 1.9 per cent. This is no doubt due to people resuming their buying habits after months of restrictions.
5. Transport and storage
Lastly, transport and storage (including postal services) is the fastest-growing business sector in the UK. Previous years have been kind to this industry. So much so, in fact, that the number these businesses increased by 10.5 per cent in 2020, even during the most uncertain days of the pandemic.
This only increased in the next year. The transport and storage sector grew by 12.5 per cent in 2021, considerably larger than any other in our list. It should come as little surprise, however, that the need for storing and posting goods was so important at a time when most people could not travel to see each other themselves
These are the fastest growing sectors of 2021. Overall, the substantial growth of transport and storage would encourage budding entrepreneurs to open businesses in this industry. Although, all five of the discussed sectors have the potential to overtake its success in the coming year. Which sector do you think will come out on top in 2022?
