The latest survey from S&P Global/CIPS showed that business activity in the private sector increased markedly in April, reaching an 11-month high, as a robust recovery in service sector output helped to offset a marginal decline in manufacturing production.
The UK composite PMI rose to 54.0 points from 52.8 points in March. Consensus estimates suggested a rise to 53.0 points. The index remains above the 50-point mark, which indicates an expansion of activity in the private sector, for the sixth month in a row. The services PMI increased to 54.9 points (11-month high) from 53.1 points in March, while the manufacturing PMI fell to 48.7 points (2-month low) from 50.3 points. Economists had expected the services PMI to drop to 53.0 points and the manufacturing PMI to drop to 50.2 points.
Data showed that new orders in the private sector rose in April, with the rate of growth being the strongest since May 2023, but the expansion was centered on the service economy as manufacturers saw a moderate downturn in order books. There were also divergent trends for export sales, with service providers recording the sharpest upturn for 13 months while goods producers experienced another decline. Meanwhile, private sector employment grew at the fastest pace in 9 months. Additional recruitment was attributed to rising business activity and a subsequent need to boost operating capacity. April data indicated a steep increase in average cost burdens across the private sector, with the rate of inflation up sharply from March and the highest since May 2023. Business activity expectations for the next 12 months remained optimistic, with the degree of optimism being higher than at any time in 2023. The positive sentiment tended to reflect a more favorable market environment, recent improvement in consumer demand and improved economic prospects for the coming year.