‘The survey data indicate that UK business activity growth regained some momentum after having slipped to a five-month low in February, but the upturn fails to change the picture of an economy that slowed in the first quarter.’ – Chris Williamson, IHS Markit
The PMI for the British services sector surprised many experts, who did not expect any significant change in March. According to IHS Markit, the PMI soared to 55.0 while analysts forecasted only a minor increase to 53.5. Thus, the PMI remained above the no-change value for the eighth consecutive month. This result showed that activity in the British services sector rebounded from five-month lows registered in the previous month. In March, business activity and new work creation grew at the fastest pace this year, so far. According to Markit, it was attributable to greater customers’ demand and favourable economic conditions, such as the weak Pound. In fact, especially high demand on British services was recorded in the United States. The overall sentiment about business prospects among the surveyed companies remained positive. Thus, half of the respondents believed that their business activity would improve in the year-ahead. However, some companies continued to complain about the Brexit-related anxiety, which precluded investment inflows. Moreover, average prices charged by service providers increased at the highest rate since 2008, as input costs surged markedly in the recent months. In addition, experts also recorded the weakest job creation since August 2016.