Good news from Britain’s service sector completed a trio of good purchasing managers’ surveys, following construction and manufacturing PMIs that were both above the key 50 expansion-constraction level. The service sector PMI jumped from 52.9 in April to 54.9 in May, with new business rising at its fastest pace for three years. The survey also suggested a welcome easing of inflationary pressures.
According to Markit, which prepares the data: “UK service sector activity rose at an accelerated rate during May as new business increased at the sharpest pace for over three years. Amid evidence of marginal capacity pressures and with positive expectations for the coming year, companies added to their payroll numbers for the fifth consecutive month.
“Meanwhile, latest price data showed that cost inflation maintained a downward trend, hitting a one-year low. Competitive pressures led to a slight fall in average output charges.
“The headline seasonally adjusted Business Activity Index remained firmly above the 50.0 no-change mark during May to signal a fifth consecutive month of service sector growth. Moreover, reaching 54.9, up from April’s 52.9, the index signalled a rate of growth that was the sharpest since March 2012.”
The composite PMI rose to its strongest since March 2012, according to Markit, signalling an acceleration in growth in the second quarter from the first quarter’s 0.3% pace. More details here.
This piece is cross-posted from David Smith’s Economics UK with permission.