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United Kingdom PMI April 2023

United Kingdom: Composite PMI rises in April to one-year high

The S&P Global/CIPS Flash Composite Purchasing Managers’ Index (PMI) rose to 53.9 in April from March’s 52.2. April’s result marked the best performance since April 2022. As a result, the index moved further above the 50.0 no-change threshold, signaling a faster improvement in private sector operating conditions compared to the previous month.

There were divergent trends between sectors, with the Manufacturing PMI clocking in at 46.6 in April, (March: 47.9), and the services PMI activity index increasing to 54.9 in April (March: 52.9). In the manufacturing sector, customer destocking and cost-cutting measures tamed demand, while service providers benefited from solid private spending. Moreover, manufacturing new orders and exports fell; services firms saw growth in exports and higher new orders thanks to stronger spending on travel, leisure and entertainment. In the private sector as a whole, input costs rose at the slowest pace in over two years amid lower energy prices and improved supply chains, although wage growth continued to spur output prices.

Chris Williamson, chief business economist at S&P Global, said:

“Growth is lopsided, […] with surging demand for services contrasting with an ongoing downturn in demand for goods. Even within the service sector, growth is dependent on consumers switching spending from goods to services and a revival of financial services activity, both of which are areas susceptible to the impact of higher interest rates and the ongoing cost of living squeeze. Business services and manufacturing are clearly struggling.”

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