UK private-sector growth rises to six-month high

Activity across the UK’s private sector has grown at the fastest rate for six months after strong trading in the service industry, according to new data.

However, economists cautioned that the uptick in activity “doesn’t signal a recovery”.

The S&P Global flash UK composite purchasing managers’ index (PMI) reported a reading of 52 in March, up from 50.5 in February.

The flash figures are based on preliminary data. Any score above 50.0 indicates that activity is growing while any score below means it is contracting.

The latest reading was stronger than expected, with a consensus of analysts having predicted a reading of 51 for the month.

Upturn

Chris Williamson, chief business economist at S&P Global Market Intelligence, said: “An upturn in business activity in March brings some good news for the Government ahead of the Chancellor’s spring statement, offering a respite from the recent flow of predominantly downbeat economic data.

“However, just as one swallow does not a summer make, one good PMI doesn’t signal a recovery.”

The reading comes days before Chancellor Rachel Reeves launches the Government’s spring statement on Wednesday.

However, the latest survey indicated business expectations for the year remained close to the 25-month low seen in January amid concerns over tax and labour cost increases due to take place in April, linked to the autumn budget.

Manufacturing

Manufacturing firms recorded the weakest degree of confidence in the sector for more than two years.

The latest survey data also pointed to another contraction in overall business activity in the manufacturing sector, which saw its weakest reading for 17 months.

Firms in the sector highlighted worries over potential US tariffs and gloomy forecasts for export sales due to volatility in global markets.

However, service sector firms saw their strongest activity for seven months as they reported an improvement in sales opportunities despite lingering concerns over constrained business investment.