(Corrects December services reading.)
The UK service sector saw its strongest performance since May last year, according to new data on Monday.
The S&P Global UK services business activity index posted 54.3 points in January, up from 53.4 points in December and the earlier ’flash’ reading of 53.8 points.
Coming in above the 50.0 point no-change mark, the increase shows that growth accelerated in January.
‘The revival in UK service sector performance gained momentum at the start of 2024, with output growth accelerating to its fastest for eight months amid stronger business and consumer spending. New orders have also rebounded this winter as receding recession risks and looser financial conditions led to greater willingness-to-spend among clients,’ said Tim Moore, economics director at S&P Global Market Intelligence.
‘Inflationary pressures subsided during January, despite stronger demand conditions. Latest data indicated that total input costs increased at one of the slowest rates seen in the past three years. Softer cost inflation reflected lower energy and fuel costs, alongside falling raw material prices.’
The seasonally adjusted S&P Global UK composite purchasing managers’ index registered 52.9 points in January, up from 52.1 points in December.
It posted above the 50.0 no-change level for the third month in a row and signalled a moderate rate of expansion. Furthermore, the latest reading was up from the earlier ’flash’ reading of 52.5 points and the highest since May last year.
On Thursday last week, the seasonally adjusted S&P Global UK manufacturing PMI reading was posted at 47.0 points in January, up from 46.2 in December.
The services PMI is compiled by S&P Global from responses to surveys sent out to around 650 service sector companies in the UK, while the composite PMI is the weighted average of both the services and manufacturing PMIs. Responses are collected in the second half of the month.
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