The UK private sector growth strengthened to a six-month high in March, driven by the fastest upturn in the services economy since 2024, flash survey data from S&P Global revealed Monday. The flash composite output index registered 52.0 in March, up from 50.5 in February.
The index has remained above the crucial 50.0 mark for the seventeenth month in a row. Moreover, the score signaled the fastest growth since September 2024.
The robust growth in the service sector helped to offset the sharpest decline in manufacturing production since October 2023.
The services Purchasing Managers' Index hit a seven-month high of 53.2 compared to 51.0 in February. The score was well above forecast of 51.2.
At 44.6, the manufacturing PMI remained at an 18-month low and down from 46.9 in February. The score was forecast to rise to 47.3.
There was contrasting trends for new order volumes. Manufacturers reported a steep export-led downturn in sales. Meanwhile, services providers logged an increase in new work for the first time this year.
Private sector employment decreased for the sixth straight month in March. Respondents cited business restructuring, investments in automation and the non-replacement of leavers in response to rising payroll costs as reasons for the fall in employment.
Input cost inflation eased further from January's nine-month high. Meanwhile, output charge inflation was unchanged since the previous month.
Overall business activity expectations for the year ahead remained close to the 25-month low seen in January. While manufacturers' sentiment dipped to the lowest since November 2022, optimism among service providers rose to a five-month high.
"An upturn in business activity in March brings some good news for the government ahead of the Chancellor's Spring Statement, offering a respite from the recent flow of predominantly downbeat economic data," S&P Global Market Intelligence Chief Business Economist Chris Williamson said.
"However, just as one swallow does not a summer make, one good PMI doesn't signal a recovery," Williamson added.
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