UK April flash services PMI 60.1 vs 58.9 expected
Latest data released by Markit/CIPS - 23 April 2021
A solid beat in the headline reading, which comes in at a 80-month high with the manufacturing reading being at its highest level in nearly 27 years. The composite reading also shows a strong beat, coming in at a 89-month high.
The looser virus restrictions certainly helped to bolster economic and business activity and is a welcome development, which sets the tone for what to expect moving forward.
Business expectations for the next 12 months held close to the series-record high seen in March, so that gives an idea of the outlook. Markit notes that:
"Companies are reporting a surge in demand for both goods and services as the economy opens up from lockdowns and the encouraging vaccine roll-out adds to a brighter outlook. In more than 23 years of PMI history, we have only seen one spell of faster growth than this, recorded between August and November 2013.
"Business activity should continue to grow strongly in May and June as virus restrictions are eased further, setting the scene for a bumper second quarter for the economy. "There's also good news for the job market. With optimism about the year ahead continuing to run close to March's all-time high, firms have been encouraged firms to take on extra staff at a rate not seen for over three and a half years.
"There are some causes for concern, however, as export performance remains relatively lacklustre, often linked to post-Brexit trading conditions, and prices continue to rise sharply. "Although exports returned to growth after three months of decline, the rate of increase remained relatively subdued compared to export trends seen in many other economies.
"Prices charged for goods by manufacturers are meanwhile rising at a rate not seen for a decade, linked to higher global prices for many inputs and near-record supply shortages. These prices will inevitably feed through to higher inflation as we head into the summer, though there's much uncertainty as to how long the inflationary impact will last. Importantly, supply delays will need to ease markedly from near-record levels to help being price pressures down."