UK private sector output grows at fastest pace in a year

Output in the UK’s private sector grew in April at the fastest pace in a year, according to a survey released on Friday.

The S&P Global/CIPS flash composite purchasing managers’ index - which measures activity in the manufacturing and services sectors - rose to 53.9 from 52.2 in March. This marked the strongest growth in a year and was ahead of expectations for a reading of 52.5.

Meanwhile, the services PMI came in at 54.9 in April, up from 52.9 a month earlier, making it the highest level in a year.

It was a different picture for the manufacturing sector, however, with the flash manufacturing output index falling to 48.5 in April from 49.0 in March and remaining in contraction territory.

Chris Williamson, chief business economist at S&P Global Market Intelligence, said growth is "lopsided", with surging demand for services contrasting with an ongoing downturn in demand for goods.

"Even within the service sector, growth is dependent on consumers switching spending from goods to services and a revival of financial services activity, both of which are areas susceptible to the impact of higher interest rates and the ongoing cost of living squeeze. Business services and manufacturing are clearly struggling," he said.

"However, for now the key takeaway is that the economy as a whole is not only showing encouraging resilience but has gained growth momentum heading into the second quarter, the latest PMI reading broadly indicative of GDP rising at a robust quarterly rate of 0.4%."