The beauty and personal care industry contributed £24.5bn to the UK economy in 2022.
This is down 28.1% compared with pre-pandemic levels, according to the British Beauty Council’s latest Value of Beauty report.
Disruptions caused by the Covid-19 pandemic resulted in a lowered GDP contribution, but the report stressed that the industry is recovering.
Over half of the total contribution (£12.3bn) was generated exclusively by retailers, wholesalers and manufacturers.
A further £4.9bn of economic activity was also stimulated by the industry’s domestic supply chain purchases last year.
The professional sector was the next biggest single contributor to UK economic growth in 2022, generating £5.1bn during the year.
“The challenges presented by the Covid-19 pandemic meant that the direct GDP contributions of the personal care industry fell by 28.1% from 2019 to 2020,” the British Beauty Council said in a statement.
“Since then, the industry has shown signs of a recovery, with growth in direct GDP contributions stronger than in the retail and wholesale industries.”
The Value of Beauty report was first launched in 2019 to assess how the beauty industry's economic impact has evolved.
Created in collaboration with global forecast firm Oxford Economics, it also assesses the latest developments and challenges being faced by beauty brands and professionals.
It found that the use of artificial intelligence (AI) applications saw significant increases in 2022.
Businesses in the personal care sector are increasingly using the technology to create personalised services, along with product control and supply chain management.
However, UK businesses are experiencing adverse effects following the UK’s exit from the European Union.
The key impacts identified include increased trade barriers and a shortage of skills following changes to migration law.
A survey conducted by the British Chambers of Commerce found that 49% of UK exporters faced difficulties in adapting to the changes required to trade goods since Brexit.
“This aligns with the views shared by the experts we interviewed who agreed that Brexit had caused delays for exporting businesses in the personal care industry,” a statement from the Council read.
The British Beauty Council said there is also evidence that the new trade barriers have disproportionately damaged SMEs due to rising costs and increased bureaucracy.
Smaller businesses do not have the “time or money” to deal with these issues, the council added.