UK Private Sector Logs Strong Growth In March

(RTTNews) - The UK private sector registered another increase in activity in March, reflecting robust performance by the service economy, flash survey results from S&P Global showed on Friday. The flash Chartered Institute of Procurement & Supply composite output index posted 52.2 in March, down from February's eight-month high of 53.1 and economists' forecast of 52.7. Nonetheless, the reading was above the 50.0 no-change mark.

"The surveys are broadly consistent with GDP growing at only a modest quarterly rate of 0.2%, but this represents a welcome expansion compared to the lack of growth seen in the second half of last year," S&P Global Market Intelligence Chief Business Economist Chris Williamson said.

The services Purchasing Managers' Index fell to a two-month low of 52.8 in March from 53.5 in the previous month. The expected score was 53.0.

At the same time, the manufacturing PMI slid to 48.0 in March from 49.3 a month ago and remained below the forecast of 50.0.

The survey showed a solid growth in new business volumes in March, with the latest upturn the strongest since April 2022. The increase largely reflected the improvement in the service economy.

Employment was broadly unchanged across the private sector in March. By sector, job creation hit a three-month low in the service economy, while manufacturers cut their staffing numbers at a faster pace than in February.

Although average cost burdens increased sharply, the rate of inflation moderated for the fourth month in a row. Meanwhile, output price inflation continued to drift downwards in March. The average selling prices grew at the slowest pace since August 2021.

Looking ahead, private sector firms are optimistic about their business activity prospects over the next 12 months. Confidence edged up to the highest since March 2022.

Official data released earlier in the day showed that retail sales grew at the fastest pace in four months in February on robust non-food stores sales even as high inflation eats into households' purchasing power. Sales were up 1.2 percent on a monthly basis, following a 0.9 percent rise in January.

Elsewhere, survey results from the GfK showed that consumer confidence strengthened to a one-year high in March. The index rose to -36 in March, still the reading remained negative signaling pessimism due to continuing concerns about personal financial situation.