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The growth in UK’s service and manufacturing sectors accelerated in January, flash data published by S&P Global showed Friday, though cost pressure intensified. The UK purchasing managers’ composite output index rose to a 21-month high of 53.9 points in January from 51.4 points in December, easily beating the FXStreet-cited consensus of a softer uptick to 51.7 points in January. Climbing further above the neutral 50-point mark separating growth from contraction, it indicates UK private sector activity accelerated in January. The composite data is calculated using a weighted average of the services and manufacturing readings. The flash services business PMI improved to 54.3 points in January from 51.4 points in December, outperforming the consensus of 51.7 points in January. Notably, companies reported the greatest optimism about the business outlook since before the 2024 autumn budget. S&P Global said January signalled ‘a sustained improvement in new order intakes across the private sector economy, which contributed to the most upbeat level of business optimism for 16 months. However, strong input cost inflation persisted, which resulted in the greatest increase in average prices charged by private sector firms since August 2025.’ The flash manufacturing PMI climbed to 51.6 points in January, a 17-month-high, from 50.6 points in December. The flash manufacturing output index rose to 51.5 points in January from 51.0 points in December. S&P Global Market Intelligence analyst Chris Williamson said: ‘While growth continues to be driven by the service sector, and in particular financial services and tech, the manufacturing sector is also continuing to report a gathering recovery aided by resurgent demand, with goods exports notably rising for the first time in four years. ‘The good news was tempered, however, by the upturn in order books failing to stem a steep loss of jobs, which companies commonly blamed on the need to reduce high costs. These cost pressures were again often linked to government policies relating to higher national insurance contributions and the national minimum wage, and led to an especially steep drop in hospitality jobs. ‘High staffing costs were meanwhile again widely reported as a key cause of higher selling prices, hinting at an intensification of price pressures at a level above the Bank of England target.’ The flash PMI survey draws upon a panel of 1,300 companies based in the UK manufacturing and service sectors, with responses collected between January 12 and 21. Final January data for UK manufacturing activity will be out on February 2, while services and composite data will be released February 4. Copyright 2026 Alliance News Ltd. All Rights Reserved.
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