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Growth in the UK’s services sector accelerated sharply in April, according to the latest survey data on Thursday, helping to drive growth in the private sector overall amid a slump in manufacturing.
The S&P Global/CIPS services purchasing managers’ index rose to 55.9 points in April from 52.9 in March. Rising further above the 50-point mark that separates expansion from contraction, it shows activity in the sector increased sharply.
It was the fastest rise in activity for 12 months, and higher than the flash estimate of 54.9.
‘Service providers experienced the steepest upturn in new work for 13 months as resilient consumer spending combined with a turnaround in demand for business services to boost overall order books,’ said Tim Moore, economics director at S&P Global Markets Intelligence.
Survey respondents reported stronger consumer spending, especially in travel, tourism and leisure sectors, as international visitor numbers continued to recover.
‘While the growth outlook has improved considerably for the service economy this spring, a swift rebound in customer demand appears to have reignited inflationary pressures,’ Moore cautioned.
Many service firms cited staff wages as driving up input costs and average prices, he noted.
The service sector was feeling largely optimistic looking forward, expecting strong demand from the King’s Coronation as well as three bank holidays in May.
Meanwhile, the composite PMI - which weighs the services and manufacturing sectors - rose to 54.9 from 52.2, beating the flash estimate of 53.9. On Tuesday, the manufacturing PMI had slipped to a three-month low of 47.8 from 47.9, indicating a worsening contraction in the sector.
The UK services PMI is compiled by S&P Global from responses to surveys sent to purchasing managers at around 650 UK service sector companies, with data collected between April 12 and 26.
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