The UK’s services industry returned to growth in March, ending four months of decline.
Driven by a rise in new orders ahead of lockdown restrictions being eased, the latest IHS Markit/CIPS Purchasing Managers’ Index (PMI) for services stood at 56.3 in March, with any score above 50 indicating growth. This comes after the index recorded a slight contraction of 49.5 in February and is the fastest rate of output expansion for seven months.
Business activity, new orders and employment all picked up from the previous month, and the renewed job creation in March represented the first overall expansion of staffing numbers across the service sector since the start of the Covid-19 pandemic.
“UK service providers were back in expansion mode in March as confidence in the roadmap for easing lockdown restrictions provided a strong uplift to new orders,” said Tim Moore, economics director at IHS Markit, which compiles the survey.
The forthcoming easing of lockdown also contributed to another improvement in business expectations for the year ahead, with two-thirds of the survey panel forecasting an increase in activity over the coming year and only 8% predicting a fall.
The optimistic outlook reflected signs of pent-up demand and a boost to growth projections from the successful UK vaccine rollout, Moore explained.