UK PMI Services was finalized at 53.4 in December, up from November’s 50.9, and the highest reading since last June. S&P Global noted continuous rise in output and new work for the second consecutive month. However, the sector also saw a slight decline in employment numbers, and there was acceleration in price charged inflation. Price charged inflation accelerated again. PMI Composite was finalized at 52.1, up from prior month’s 50.7.
Tim Moore, Economics Director at S&P Global Market Intelligence, stated, “December data indicated that the UK service sector ended last year on a high,” attributing the recovery in client demand to expectations of lower borrowing costs and an improving global economic outlook for 2024.
Moore also highlighted that business activity expectations for the upcoming year are now at their most optimistic since May of the previous year, although he pointed out that staff hiring remained a weak spot in December, with many companies yet to lift their hiring freezes.
Moore further commented on the inflationary pressures within the service sector, noting substantial input cost increases driven by strong wage pressures. This trend has led to a robust rise in prices charged across the service sector as businesses strive to protect their margins. The rate of inflation in this regard was the fastest since July of the previous year, indicating the challenges faced by service providers in managing costs while maintaining competitive pricing.
