Private sector growth slows in March as manufacturers drag
February’s PMI score broke a six-month losing streak.
The UK’s private sector appeared to grow for a second month running after it broke a half-year losing streak, a closely-watched survey has found.
However, growth slowed considerably in March, pulled down by the manufacturing sector, according to the S&P Global/CIPS flash UK purchasing managers’ index.
The index – which is based on preliminary data before a full report next month – showed a score of 52.2 in March, compared to 53.1 in February.
February’s score had been the first time in six months that the index had jumped back into positive territory. Anything above 50 is considered growth.
In spite of supply chain strength returning, less work resulted in job shedding and lower purchasing volumes as the sector failed to gain momentum and fell into contraction again
Chris Williamson, chief business economist at S&P Global Market Intelligence, said: “With the flash PMI surveys signalling a second month of rising output in March, the UK economy looks to have returned to growth in the first quarter.
“The surveys are broadly consistent with GDP (gross domestic product) growing at only a modest quarterly rate of 0.2%, but this represents a welcome expansion compared to the lack of growth seen in the second half of last year.”
The figures also showed the manufacturing sector is in decline – it scored just 49 – due to subdued order books.
CIPS chief economist Dr John Glen said: “The manufacturing sector’s undoing remained falling pipelines of new work.
“In spite of supply chain strength returning, less work resulted in job shedding and lower purchasing volumes as the sector failed to gain momentum and fell into contraction again.
“In contrast to recent consumer price inflation figures, the latest data showed that cost rises for businesses seem to be easing.
“With optimism the strongest since March 2022, private sector businesses are relieved that the UK appears to have dodged a recession, technically at least, though customs delays and the painful price increases in items such food and fuel remain challenges for the year ahead.”