Financial News: UK Private Sector Expands Most In 4 Months

UK Private Sector Expands Most In 4 Months

08/22/2024 - 07:10:00 (RTTNews)

(RTTNews) - The UK private sector activity logged accelerated growth in August, supported by a robust upturn in new order intakes, flash survey results published by S&P Global revealed on Thursday.

The flash composite output index rose to a 4-month high of 53.4 in August from 52.8 in July. The score was forecast to rise to 52.9.

A reading above 50.0 suggests expansion in the private sector.

During August, service activity growth also rose to a 4-month high, while manufacturing output advanced at the quickest pace in twenty-six months, the survey said.

The services business activity index stood at 53.3 versus 52.5 in July, above the expected score of 52.8.

The manufacturing Purchasing Managers' Index climbed to 52.5 in August from 52.1 in July.

New orders received by the British private sector grew sharply on the back of improving sales pipelines and a rising willingness to spend among clients, especially in domestic markets.

The favorable domestic demand was attributed to softer inflationary pressures and lower borrowing costs, alongside hopes of a sustained revival in UK economic conditions. Meanwhile, export orders decreased slightly due to lackluster demand from EU clients.

The rate of job creation across the private sector increased at the fastest pace in 14 months, with higher staffing levels seen in both the manufacturing and service sectors.

On the price front, input price inflation eased to its lowest for just over three-and-a-half years in August amid a renewed slowdown in cost pressures across the service sector and more competitive market conditions. As a result, selling prices also rose at the slowest pace since the start of 2021.

Looking ahead, business activity expectations over the next twelve months remained positive in August in terms of improving sales pipelines and hopes of increased domestic investment spending. Apart from that, reduced political uncertainty and the prospect of further interest rate cuts also boost confidence.

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