- UK Services PMI 55.0 vs. 54.9 expected and 53.1 prior.
- UK Composite PMI 54.1 vs. 54.0 expected and 52.8 prior.
Key findings:
- Activity and new work rise at fastest rates for 11 months.
- Staff hiring remains subdued.
- Input cost inflation highest since August 2023.
Comment:
Tim Moore, Economics Director at S&P Global Market Intelligence, which compiles the survey: "Service providers benefited from improving business and consumer spending in April as more favourable demand conditions underpinned the greatest improvement in activity since May 2023. The latest survey results are consistent with the UK economy growing at a quarterly rate of 0.4% and therefore pulling further out of last year's shallow recession.
"Relief at a turnaround in the economic outlook was commonly cited as a factor supporting sales pipelines in April. However, there were also reports that clients remained somewhat risk averse and under pressure from elevated inflation. These undercurrents constrained margins and meant that some service sector companies were cautious about taking on more staff. The overall rate of job creation was only marginal in April and slipped to its weakest so far in 2024.
"Prices charged inflation across the service sector eased to a three-year low in April, suggesting that the pass-though of higher costs has started to wane. This was despite a sharp and accelerated rise in business expenses as strong wage inflation pushed up operating costs.
"Business activity expectations for the year ahead were upbeat overall in April, therefore adding to signs that the recovery in service sector performance has further to run. Election uncertainty and fading prospects for interest rate cuts were cited as headwinds on the horizon, but survey respondents still mostly reported positive sentiment towards their business investment plans and longer-term growth opportunities."
