- Final Services PMI 49.0 vs 48.9 preliminary
- Prior 52.5
- Final Composite PMI 48.5 vs 48.2 preliminary
- Prior 51.5
Key findings:
- Renewed downturn in new work weighs on service
sector output - Fastest decline in export sales since February 2021
- Business activity expectations slump to a two-and-
a-half year low
Comment:
Tim Moore, Economics Director at S&P Global Market
Intelligence, said:
“UK service sector output slipped into contraction for
the first time in one-and-a-half years as heightened
business uncertainty weighed on order books during
April. Export conditions were particularly weak, with new
business from abroad falling to the greatest extent since
February 2021.
“Survey respondents often commented on the impact
of global financial market turbulence in the wake of US
tariff announcements. Businesses in the technology and
financial service sectors noted rising risk aversion and
delayed spending decisions among clients, especially in
relation to major investment plans. Consumer service
providers meanwhile cited subdued domestic economic
conditions and challenges with passing on rising payroll
costs, especially those in the hospitality and leisure
sectors.
“Input prices increased at the steepest pace since the
summer of 2023 as higher National Living Wage rates and
National Insurance contributions added to payroll costs
in April. Prices charged inflation was also the strongest
for nearly two years as service providers sought to pass
on additional costs to clients despite fragile demand.
“Business expectations for the year ahead fell sharply
as service sector firms braced for an extended period of
global economic turbulence and heightened recession
risks. Some 22% of the survey panel predict an outright
decline in business activity during the next 12 months, up
from 14% in March and well above the post-election low
of 6% in July 2024.”
This article was written by Giuseppe Dellamotta at www.forexlive.com.
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