UK Private Sector Growth Improves

(RTTNews) - The UK private sector economy gained momentum in April after posting the weakest growth in six months in March, supported by moderate upturns in both manufacturing production and service sector output, survey data from S&P Global showed Thursday.

The composite output index posted 52.0 in April, up from 50.3 in March. A score above 50.0 indicates expansion.

Higher levels of output have been recorded in each of the past twelve months and the latest expansion was slightly stronger than the average over this period.

Manufacturing output returned to growth in April and business activity in the service economy picked up from March's 11-month low.

The services Purchasing Managers' Index climbed to 52.0 from 50.5 in the previous month. At 53.6, the manufacturing PMI hit a 47-month high, up from 51.0 in March.

"The survey highlights the difficult choices facing policymakers at the Bank of England," S&P Global Market Intelligence Chief Business Economist Chris Williamson said.

"The spike in price pressures will add to calls for rate hikes to dampen inflation, but the Bank will need to carefully assess the degree to which economic growth might weaken," Williamson added.

"April's PMI is indicative of the economy rebounding from a flat picture in March to a 0.2% quarterly growth rate, the details of the survey hint strongly that this pace cannot be sustained should the crisis persist," the economist said.

Total new orders stabilized in April with moderate growth in the manufacturing sector helping to offset a marginal fall in the service economy. Employment decreased for the nineteenth consecutive month in April.

At composite level, average cost burdens posted the fastest rise in nearly three-and-a-half years. Finally, business optimism fell to its second-weakest since December 2022 due to concerns about rising price pressures and the impact of the war on supply chains.