UK Private Sector Growth Hits 1-Year High

(RTTNews) - The UK private sector expanded for the third successive month in April to the strongest level in a year, driven by a sharp upturn in the services economy, while manufacturing remained in the contraction zone, flash survey results from S&P Global showed on Friday.

The flash Chartered Institute of Procurement & Supply composite output index climbed to 53.9 in April from 52.2 in March. The expected score was 52.5.

Any reading above 50 indicates expansion in the sector.

"Growth is lopsided, however, with surging demand for services contrasting with an ongoing downturn in demand for goods," S&P Global Market Intelligence Chief Business Economist Chris Williamson said.

The Service Purchasing Managers' Index, or PMI, rose to a 1-year high of 54.9 in April from 52.9 in the previous month. The reading was expected to remain stable at 52.9.

At the same time, the manufacturing PMI slid to 46.6 in April from 47.9 a month ago and remained below the forecast of 48.5.

The service economy's new order growth reached a 13-month high as spending on travel, leisure, and entertainment increased.

On the other hand, manufacturers attributed a renewed fall in new work to customer destocking, elevated energy costs and subdued demand for big ticket consumer goods.

Due to the lower fuel and energy prices, as well as better supply circumstances, April data showed the smallest increase in input costs for private sector companies in nearly two years.

Despite a few obstacles to employment growth, the rate of job creation in the British private sector increased to a six-month high, driven by greater hiring in the service sector.

Measured overall, the degree of confidence towards output growth in the year ahead eased slightly since March but was the second highest since March 2022, the survey said.