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The UK private sector saw an expected return to growth in February, according to preliminary survey results on Tuesday.
The S&P Global/CIPS UK flash composite purchasing managers’ index rose to an eight-month high of 53.0 points in February from 48.5 in January. Crossing over the 50-point no-change mark, it shows the UK private sector has returned to growth.
The reading was well above the 48.7 market consensus, as cited by FXStreet.
‘Much better than anticipated PMI data for February indicate encouraging resilience of the economy in the face of headwinds which include rising interest rates, the ongoing cost of living crisis, labour shortages and strikes,’ said Chris Williamson, chief business economist at S&P Global Market Intelligence.
The business mood in the UK was lifted by signs that peak inflation has passed, as well as the improvement of supply chains, and the receding risk of a recession, he added.
The flash services PMI returned to growth at 53.3 points in February from 48.7 in January and came in well above market consensus of 48.3.
‘A number of survey respondents commented on stronger demand for business services amid an improving global economic outlook and reduced domestic political uncertainty. However, there were also reports citing a continued squeeze on consumer spending due to cost of living difficulties and higher borrowing costs,’ S&P Global said.
The flash manufacturing PMI reached a seven-month high of 49.2 points rising from 47.0 in January. The market had been expecting the factory PMI to edge lower to 46.8 in February.
The manufacturing output index returned to a state of growth with a reading of 51.6 points, rising from 47.0.
‘Supplier delivery times improved at the fastest rate since June 2009 for manufacturers as the marketplace showed signs of some recovery,’ said CIPS Chief Economist John Glen.
‘Manufacturers saw the wheels of industry grind a little slowly and continued to report job shedding and cautious purchasing activity due to stocks built up last year.’
The flash composite UK PMI is compiled from responses to surveys sent to 650 service providers and 650 manufacturers by S&P Global, with data collected between February 10 and 17.
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