Alongside manufacturing, the UK’s mighty service sector – accounting for around three-quarters of our GDP – also expanded last month, showing a PMI reading of 53.1. While this was the fifth successive monthly expansion, the reading was slightly down from the previous month – amid strong wage pressures, which led to some slowdown in service sector hiring.
While business and consumer spending remains resilient, industry leaders point to squeezed household and corporate budgets, as well as still-elevated borrowing costs as an ongoing drag on growth. Having said that, confidence in the demand outlook continues to build.
The third main sector – construction – also posted a moderate expansion last month, with a PMI reading of 50.2, up from 49.7 in February, marking the end of a six-month decline. The biggest boost was in civil engineering, but residential building also grew at its fastest pace since November 2022.
While the sector remains dogged by political uncertainty, and ongoing skills shortages, only around a 10th of those surveyed believe construction activity won’t continue to grow over the next 12 months.
For the Conservatives, of course, even the most tentative signs of economic progress are political manna from heaven. The Tories’ election strategy – to the extent that they have one – is to delay the general election, ahead of the January 2025 deadline, for as long as possible, while hoping the economy improves.
