Yahoo Finance UK services sector continues recovery
The UK’s service sector enjoyed its strongest rise in new business in a year, amid growing confidence among clients in both domestic and international markets.
The S&P Global/CIPS UK services PMI survey showed a reading of 52.9 last month, down from a score of 53.5 in February. Any reading above 50 is considered growth.
"March data confirmed that the UK service sector returned to growth during the first quarter of 2023, supported by a sustained rebound in new orders as business and consumer confidence improved from the lows seen last autumn," Tim Moore, economics director at S&P Global Market Intelligence, said.
🇬🇧#UK service providers reported a sustained expansion in activity in March (#PMI at 52.9; Feb: 53.5). The recovery was cemented by the fastest increase in new order volumes in a year and the strongest rise in new export sales in survey history. Read more: https://t.co/ljcPqz8KIS pic.twitter.com/Gs79jbtVWR
— S&P Global PMI™ (@SPGlobalPMI) April 5, 2023
The PMI survey showed an improvement in business expectations for the fifth consecutive month and optimism about business prospects being the highest since March last year.
Read more: UK inflation is 'bad luck', says Bank of England's chief economist
UK firms said they had seen the strongest increase in new export sales since 2014, when it began keeping records.
“Export sales provided an additional boost to the service economy during March as the ongoing recovery in business travel and events helped to drive the fastest rise in new orders from abroad for at least eight-and-a-half years.
“Tight labour market conditions remained a constraint on business capacity across the service sector and fuelled another month of historically steep wage pressures.
Read more: UK manufacturing output returns to decline in March
“However, overall business expenses increased at the slowest pace since May 2021 as lower transport bills and falling commodity prices helped to offset rising staff costs,” Moore added.
However, some companies were worried about the rise in interest rates by the Bank of England and chancellor Jeremy Hunt's corporate tax hikes.
The services sector accounts for almost 80% of UK economic output.
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