LONDON (dpa-AFX) - The UK service sector growth accelerated to a 16-month high in August as output and new orders rose at marked rates, survey results from S&P Global showed on Wednesday.
The headline services The Purchasing Managers' Index rose to 54.2 in August from 51.8 in July. This was above the flash score of 53.6. A reading above 50 indicates expansion in the sector.
New orders rebounded in August, and the rate of growth was the strongest since September 2024, driven by rising sales in both domestic and overseas markets. The upturn in export orders was attributed to successful business development strategies in developed economies, with survey respondents often citing rising sales to clients in the EU and US.
Backlogs of work decreased for the twenty-seventh successive month in August despite a robust increase in workloads. Firms continued to reduce staffing numbers amid rising payroll costs caused by spare capacity and intense margin pressures.
On the price front, input price inflation accelerated from July's 7-month low as higher food and technological costs along with efforts by suppliers to pass on higher National Insurance contributions. Selling price inflation remained sharp and reached its highest level since April.
Looking ahead, service providers remained confident about expected business activity over the next year on the back of positive forecasts for business and consumer spending, as well as hope of a more favorable global economic backdrop outlook.
The composite output index climbed to 53.5 in August from 51.5 in July, indicating the strongest expansion of the British private sector since August 2024.
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