UK Services Growth Strongest In 11 Months

The UK service sector expanded at the quickest pace in nearly a year, spurred by a renewed strengthening of order books, final data from S&P Global showed on Friday.

The services purchasing managers' index rose to 55.0 in April from 53.1 in March. That was also above the flash score of 54.9. A score above 50 indicates expansion.

The UK service sector expanded for the sixth consecutive month in April.

New orders also grew at the fastest pace in nearly a year as sales pipelines improved amid stronger business and consumer spending. New export orders rose at the strongest rate since March 2023 on the back of stronger sales demand for clients in the US and Asia.

Service sector employment increased slightly in April, and the subdued recruitment was mainly due to a shortage of suitable candidates along with elevated wage costs.

In April, there was a slight decrease in work backlogs despite another notable improvement in new order intakes, as business capacity was sufficient to process both new and existing workloads.

On the price front, input price inflation accelerated to an eight-month high, led by additional salary payments. Nonetheless, charge inflation eased to the lowest level since April 2021 amid competitive pressures.

British service providers remained confident about business activity prospects for the year on the back of a turnaround in client demand and forthcoming marketing initiatives, along with rising business investment and long-term expansion plans. However, the degree of optimism nonetheless eased further from February's two-year peak.

On the contrary, election uncertainty, elevated interest rates, and fragile global economic conditions were among the factors likely to dampen business activity growth.

The composite output index climbed to 54.1 in April from 52.8 in March, indicating the strongest upturn in private sector business activity in a year.

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