How can I invest in the UK’s fastest growing sectors?

As we emerge from the pandemic and into economic crisis, it’s not easy deciding how to invest in tomorrow’s top stocks.

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The UK’s purchasing habits have dramatically shifted in the past couple of years, altered by the pandemic itself and by our emergence from it. It makes deciding how to invest in the strongest sectors a bit tricky.

Card machine and payments firm Dojo has just released its Business Growth Report, looking at the changes. It combines data from Yahoo and Google with purchasing data and shows where consumer spending and investment have been going.

Spending in pubs and bars rose by 37.5% between March 2020 and March 2022. And the more general leisure and entertainment sector has grown too, up 20%.

Booze champion

Whichever end-user outlets are taking in the booze cash, I reckon Diageo has to be one of the winners. It offers a huge range of alcoholic beverage brands. So whether people are heading out to pubs for a drink, or whether they had a drink at home to soothe the lockdown blues, Diageo got some sales.

The Diageo share price is one of the few in the FTSE 100 that’s well ahead of its pre-pandemic levels. So maybe it’s resilient in good and bad times. But it’s not much of a secret in investing circles.

There are others that have not recovered too well, including Whitbread. Whitbread is still way below its pre-pandemic share price, and down 5% over the past 12 months. But it’s picked up a bit in July so far. I wonder if there’s an opportunity there.

Online boost

The Dojo report also shows big gains for internet and network services businesses. That includes companies like BT Group. And I’m not too surprised, seeing the way so many people moved so much of their lives online.

How much that might revert in the coming years, and how much is a permanent change? I reckon I see a lot of the latter. Many were forced by the pandemic to try the online way of doing things, and found they like it.

I’m not seeing much overall change in share prices, though. BT shares are up less than 1% over the past year, and hovering close to pre-pandemic levels. And that’s after a multi-year slump, so there might be more gains to come. BT has its own problems, like debt, though.

What next?

I don’t want to analyse the whole changing trends thing. I’ve just picked a couple of examples I found particularly interesting. And though I do find research like this valuable, it’s all hindsight. To think of investing in any sectors covered by the report, I’d need to do a lot of individual research.

But this kind of thing does make me think about how to choose the future best sectors. The pandemic years clearly threw up some great investments. Right now, I’m looking at sectors that are being hit by the global economic downturn and by rising inflation, and how they might emerge once things get better.

In particular, I think the financial sector could well offer some of today’s best investment buys. It does, however, face obvious short-term risk. But it will be interesting to see whether my thoughts end up matching future hindsight.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be considered so you should consider taking independent financial advice.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has recommended Alphabet (A shares), Alphabet (C shares), and Diageo. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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