UK Services PMI Expands to 52.1 in July, First Growth Since April

S&P Global announced on August 5 that the UK's July services Purchasing Managers' Index (PMI) final reading reached 52.1, marking the sector's first expansion since April. The figure exceeded both the preliminary reading of 51.8 and the prior month's 48.8. The growth was driven by increased consumer spending and strong demand for technology services, according to S&P Global Market Intelligence. The composite PMI also rose to 52.2 from June's 49.3, surpassing the 50 threshold that separates expansion from contraction for the first time since April.

Composite PMI Surpasses Expansion Threshold

The UK's July composite PMI recorded 52.2, up from 49.3 in the prior month. This marked the first time the composite index exceeded the 50 baseline since April. The composite PMI combines manufacturing and services sector data to provide a broader measure of economic activity.

New Orders Index Ends Four-Month Decline

S&P Global reported that the total new orders index for services firms rose to 50.8 in July from 47.6 in June. This represented the highest level since February and ended a four-month decline that began following the outbreak of the Iran war. New export orders for services declined for the fifth consecutive month, but the rate of decrease was the smallest during that period.

Business Confidence Reaches Five-Month High

Business confidence among UK services firms reached its highest level since February. The improvement in sentiment reflected expectations of easing tensions in the Middle East and recent signs of moderating inflation pressures.

S&P Global Attributes Growth to Consumer Spending and Tech Demand

Tim Moore, Economics Director at S&P Global Market Intelligence, stated that UK services firms returned to growth in July. He explained that increased consumer spending and strong demand for technology services helped lift overall business activity. Moore noted that expectations for business activity improved for the second consecutive month, reaching the highest level since February. He added that the strengthened growth outlook for the next year partly reflected expectations of reduced tensions in the Middle East and signals of easing inflation pressures.

FAQ

What was the UK's July services PMI final reading? The UK's July services PMI final reading was 52.1, exceeding the preliminary reading of 51.8 and the prior month's 48.8. This marked the first expansion in the services sector since April.

Why did the UK services sector return to growth in July? According to S&P Global Market Intelligence, the growth was driven by increased consumer spending and strong demand for technology services. The total new orders index rose to 50.8 from 47.6, ending a four-month decline that began after the Iran war outbreak.

What level did business confidence reach in July? Business confidence among UK services firms reached its highest level since February. The improvement reflected expectations of easing Middle East tensions and moderating inflation pressures.