UK expected to leave recession as private sector grows at nine-month high
Register for free to read more of the latest local news. It's easy and will only take a moment.
The UK’s private sector has grown at the fastest rate since May last year, amid a strong performance among the services sector.
The closely followed S&P Global/CIPS flash UK purchasing managers’ index (PMI) rose to 53.3 in February, up from 52.9 the month before.
The flash figures are based on preliminary data. Any score below 50 is said to show that the sector is contracting.
The survey data points to the economy growing at a quarterly rate of 0.2-0.3% in the first quarter of 2024, allaying fears that last year's downturn will have spilled over into 2024 and suggesting that the UK’s ‘recession’ is already over
Economists had forecast the PMI would hit 53.0, according to a consensus provided by Pantheon Macroeconomics.
It represents the fourth consecutive month of growth.
Economists have suggested the survey signals that the UK is growing this quarter and therefore likely to bring the UK’s recent recession, after a contraction over the final half of 2023, to a halt.
Chris Williamson, chief business economist at S&P Global Market Intelligence, said: “The survey data points to the economy growing at a quarterly rate of 0.2-0.3% in the first quarter of 2024, allaying fears that last year’s downturn will have spilled over into 2024 and suggesting that the UK’s ‘recession’ is already over.
“It’s particularly encouraging to see that the upturn in growth has been accompanied by a surge in optimism about year-ahead prospects to the highest for two years.”
The survey found that many firms linked improved confidence to improved borrowing costs, resilient consumer demand and hopes for a return to broader growth across the economy.
It came as the data showed the service industry continued to grow, with 54.3 reading for the month.
Service firms said they saw a “turnaround in business and consumer spending” despite continued pressure from the high cost of living.
Meanwhile, the manufacturing sector saw output continue to decline, with a reading 47.3 for the month, but this reflected an improvement on the rate of decline in January.
