2024.02.0511:04:00UTC+00UK Services Activity Expands Most In 8 Months

The British service sector grew at the fastest pace in eight months in January amid a sustained rise in new orders, final survey results from S&P Global revealed Monday.

The final Chartered Institute of Procurement and Supply Services Purchasing Managers' Index climbed to 54.3 in January from 53.4 in December. The flash reading was 53.8.

The score was above the 50.0 no-change value for the third straight month, signalling the fastest rate of business activity growth since May 2023.

New orders grew at the quickest pace in eight months amid reports of greater willingness to spend among clients.

During January, new export orders showed a moderate increase, supported by stronger demand from Asia and the US, helping to offset subdued euro area business conditions.

Consequently, service providers raised their workforce numbers in an effort to boost business capacity and process unfinished work, and the rate of job creation was the fastest since July 2023.

On the price front, input price inflation eased at the start of the year, and selling prices rose at the slowest pace in four months. Overall input price inflation was mainly due to higher staff salaries.

Looking ahead, British service companies remained confident about the outlook for business activity over the next year amid hopes of long-term business expansion plans, supportive economic conditions, and expected interest rate cuts.

The final composite output index rose to 52.9 from 52.1 in the previous month, indicating a moderate increase in private sector output. The score was above the flash score of 52.5.