Business services, followed by engineering, are likely to lead Britain out of recession when the recovery comes, according to forecasts by PwC.
The professional services firm has constructed an “upturn index” that predicts which sectors will be first to benefit when the green shoots are finally seen.
It comes amid tentative signs of optimism among businesses and consumers that the decline in economic output will shortly slow down.
Post and telecommunications will not be far behind, PwC suggests, while financial services, utilities and construction will perform broadly in line with the overall economy.
Oil, gas and mining are likely to be laggards and metal products, textiles and food manufacturing may be the last to benefit from an upturn.
“It is still unclear when the recovery will begin to take hold but, as the UK emerges from the global economic downturn, there is likely to be a readjustment of the economic and business landscape,” said Yael Selfin, PwC’s head of macro consulting.
She added: “Some industries will fare better and recover sooner than others and the shape of eventual recovery may be quite different to the business environment we’ve witnessed in recent years.”
The index uses 10 economic and financial indicators covering historical performance, cyclicality and future growth potential.
Business services – which include property management, legal, computer, accountancy and advertising businesses – are in a good position because of the sector’s cyclical nature and strong long-term growth, says PwC.
The sector has the highest price-earnings ratio of the 15 analysed, suggesting investors are relatively confident about its potential for a fast recovery.
Engineering has taken a beating in the downturn – especially the motor industry, which produces a large part of the sector’s output – but PwC expects the sector to maintain much of its current capacity, putting it in a good position to benefit from recovery.
It relies on exports and could benefit medium term from the weak pound and stronger demand overseas.