Business groups say companies still need support after official figures showed the UK economy was still almost 8% lower than levels recorded before the pandemic.
The Office for National Statistics (ONS) said gross domestic product (GDP) grew by 0.4% in February, which represented an improvement from a 2.2% decline in January.
But the February reading was slightly below the forecasts of some analysts, with experts at Investec predicting a 0.7% improvement for the month.
The construction sector saw activity jump by 1.6% for the month amid a lift in new work and maintenance. Production and manufacturing activity also improved, with the two sectors revealing 1% and 1.3% improvements respectively.
But the service sector remained particularly constrained, reporting just 0.2% growth, as hospitality and retail remained constrained by pandemic restrictions.
The figures also revealed that exports to the EU increased by £3.7bn – or 46.6% – following a record slump of £5.7bn in January.
The ONS said the export increases were driven by machinery, transport equipment and chemicals. The import of goods from the EU also rebounded, increasing by £1.2bn – or 7.3% – in February.
Suren Thiru, head of economics at the British Chamber of Commerce, said: “The release of pent-up demand following the easing of restrictions and the strong vaccine rollout will boost activity. However, hope of a sustained consumer-led revival may prove too optimistic as the economic scarring caused by Covid may trigger a renewed reluctance to spend as government support winds down.
“Although there was a rebound in UK goods exports with the EU, this may reflect an unwinding of a number of temporary factors that weighed on the January outturn, including the running down of pre-Brexit stockpiling, rather than evidence of an underlying improvement in UK-EU trade flows.
“Businesses continue to encounter significant disruption and difficulty with many firms reporting serious structural issues which, if not addressed, will weigh on UK economic prospects for some time to come.”
Federation of Small Businesses chairman Mike Cherry said: “If you’d asked small business owners at this time last year about Covid-linked disruption they wouldn’t have dreamed it would be continuing so far into the future.
“These stark figures are a reminder that this lockdown needs to be the last: better to unlock more slowly than to rush and have a repeat of the damaging chaos suffered in the run-up to last year’s critical festive trading season.
“Small business confidence has now rebounded but a sizeable share of employers are concerned about redundancies with the job retention scheme winding down over the coming months.
“The Government should now turn to its build back better agenda: cutting the non-wage costs of employment to spur hiring, ending a debilitating late payment crisis that has worsened through lockdowns, and taking innovative approaches to emergency debt to realise meaningful economic value.”