Financial News: UK Services Growth Strongest In 7 Months

UK Services Growth Strongest In 7 Months

04/03/2025 - 07:36:00 (RTTNews)

(RTTNews) - The UK service sector continued to expand at an accelerated pace in March, spurred by a renewed upturn in new orders, the S&P Global purchasing managers' survey showed on Thursday.

The final services Purchasing Managers' Index climbed to 52.5 in March from 51.0 in February, below the flash reading of 53.2. A score above 50 indicates expansion, while any reading below suggests contraction in the sector.

New business grew at the fastest pace in four months on the back of strong consumer spending despite challenging business conditions, linked to constrained household budgets, rising risk aversion among clients, and elevated geopolitical uncertainty.

Export sales increased for the first time in four months and at the fastest pace since October last year, linked to a nascent rebound in European demand.

Although new orders returned to growth territory in March, there was a modest reduction in backlogs of work across the service economy.

Companies reduced workforce numbers in March, reflecting a combination of redundancies and the non-replacement of leavers. The overall rate of job shedding nonetheless eased considerably since February.

Looking ahead, business activity expectations, meanwhile, improved slightly in March but remained subdued in comparison to historic survey trends. The most prominent concerns reported by service providers in March were rising payroll costs, weak domestic economic conditions, and the impact of US tariffs on the global economic outlook.

On the price front, input price inflation eased to a 3-month low amid lower transportation costs. This contributed to the slowest rise in prices charged by service providers since December 2024.

The composite output index rose to 51.5 in March from 50.5 in February, indicating the fastest expansion in the British private sector in five months.

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