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UK service sector growth improves unexpectedly

Staff Writer |
The UK service sector activity growth accelerated unexpectedly in April, survey data from IHS Markit and Chartered Institute of Procurement & Supply showed Thursday.

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The Markit/CIPS services Purchasing Managers' Index rose to 55.8 in April from 55.0 in March. The score was forecast to fall to 54.5.

The score was above the neutral 50.0 for the ninth month in a row. The latest reading revealed the fastest upturn in service sector output since December 2016.

New business growth gained further momentum, with the pace of expansion the strongest so far this year.

Job creation also picked up to a four-month high, driven by renewed pressures on operating capacity.

A strong pace of input cost inflation persisted in April, which contributed to the steepest rise in prices charged by service sector firms since July 2008.

Meanwhile, service providers were confident about their growth prospects for the year ahead, but the degree of optimism moderated for the third straight month to its weakest since November 2016.

"The upturn in the services PMI rounds off a hattrick of good news after upside surprises to both the manufacturing and construction PMIs," Chris Williamson, chief business economist at IHS Markit, said.

"The three surveys collectively point to GDP growing at a rate of 0.6% at the start of the second quarter," Williamson added.


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