UK service sector output grows at fastest pace since May 2023

3rd May 2024 09:51

(Sharecast News) - UK service sector output grew in April at its fastest pace since May 2023, according to a survey released on Friday.

The S&P Global services PMI business activity index rose to 55.0 from 53.1 in March, coming in above the 50.0 mark that separates contraction from expansion for the sixth month in a row.

The composite PMI ticked up to 54.1 in April from 52.8 the month before. This marked the sixth consecutive month in positive territory and signalled the fastest expansion of private sector business activity since April 2023.

Tim Moore, economics director at S&P Global Market Intelligence, said: "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."