UK Service Sector Growth At 8-Month High
The UK service sector growth accelerated sharply in February as the Omicron wave of the COVID-19 pandemic subsided, final survey results from IHS Markit showed on Thursday.
The Chartered Institute of Procurement & Supply final services Purchasing Managers’ Index rose sharply to 60.5 in February from 54.1 in January.
The index signaled the fastest growth since last June but the score was below the flash 60.8.
The rates of expansion in both business activity and new orders accelerated sharply, supporting stronger job creation.
Inflationary pressures intensified in February. Input costs increased substantially in February, with the rate of inflation the second-fastest on record. At the same time, the rate of output price inflation hit a fresh record high for the second month.
Strong optimism in the ability of the sector to recover over the course of 2022 was maintained in February.
“Although the latest set of PMI data were encouraging, the inflationary picture still has the potential to limit growth, while it remains to be seen what impact the Russian invasion of Ukraine will have on the service sector and wider economy,” Andrew Harker, economics director at IHS Markit, said.
“As such, there are still downside risks even as disruption from the pandemic finally appears to be fading,” added Harker.
The final composite output index rose sharply to 59.9 in February from 54.2 in January as the easing of the Omicron wave of the COVID-19 pandemic unleashed faster growth across both the manufacturing and services sectors. The flash score was 60.2.
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