Obtain the data you need to make the most informed decisions by accessing our extensive portfolio of information, analytics, and expertise. Sign in to the product or service center of your choice.
Flash UK composite PMI at highest since November 2013
Service sector and manufacturing expand at marked rates as
lockdowns eased and demand revives
Prices rise sharply again amid near-record supply delays
Exports improve but remain weak compared to the eurozone
An easing of COVID-19 containment measures in April helped drive
the pace of UK economic growth to the best for almost seven and a
half years, according to the latest flash PMI data from IHS Markit
and CIPS. Jobs growth also accelerated to one of the fastest rates
seen over the past six years, as future expectations remained close
to March's all-time high. But rising prices are a concern, and
export growth remained lacklustre compared to recent trends seen in
many other countries.
The headline PMI covering both manufacturing and services rose
from 56.4 in March to 60.0 in April, well above expectations of a
rise to 58.2. In more than 23 years of PMI history, there has been
one spell of faster growth, recorded between August and November
2013.
Resurgent demand as lockdowns ease
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. Service activity
expanded to the greatest extent since August 2014, while
manufacturing production growth accelerated to its fastest for
eight months.
Business activity should continue to grow strongly in May and
June as lockdown measures are eased further, setting the scene for
a bumper second quarter for the economy.
Mechanical engineering leads the factory
upturn
Manufacturing trends varied by sector. Best performing was the
mechanical engineering sector, linked in part to strong exports,
followed by food and drink, despite the latter seeing a marked fall
in exports. Especially robust output growth was also recorded for
electrical & electronic goods, basic metals goods and chemicals
& plastics. Transport (vehicle) producers stood alone in
reporting a decline in both production and employment during the
month, also reporting a sharp drop in exports, while textiles and
clothing manufacturers were notable in reporting only modest
growth.
Supply delays were broad based across manufacturing, however,
running at near-record levels, but were especially acute in the
vehicle manufacturing, electrical & electronics and basic metal
industries.
Demand starts to revive for consumer-facing
services
While business-to-business services continued to lead the
service sector upturn, enjoying the strongest expansion for a
second successive month, sharply stronger growth was also recorded
for consumer services and financial services.
Although current activity remained subdued in hotels &
restaurants, it was a different story for new business inflows into
the sector, which jumped to the highest since last August.
Exports rise but remain subdued
While exports returned to growth after three months of decline,
the rate of increase remained relatively subdued compared both to
domestic orders and export trends seen in many other economies,
often linked to post-Brexit trading conditions.
German goods exports, most notably, have been running at a
record high in recent months, according to PMI data, leading to the
fastest growth of eurozone goods exports on record in March and
April, albeit the rate of increase slipping slightly in April due
in part to heightened lockdown measures across Europe.
Prices charged for goods rise at steepest rate for a
decade
Prices were a second cause for concern. Input costs rose at a
rate not seen for over four years, leading to another sharp rise in
average prices charged for goods and services. Prices charged at
the factory gate for goods jumped especially markedly, rising at a
rate not seen for a decade. Companies linked increased prices to
higher global prices for many goods, often due to supply shortages,
as well as rising import costs linked to Brexit.
Hiring on the rise
Better news came from the job market numbers, with the survey
highlighting how the upturn is feeding through to higher
employment. With optimism about the year ahead continuing to run
close to March's all-time high, firms have been encouraged to take
on extra staff at a rate not seen for over three and a half
years.
Chris Williamson, Chief Business Economist, IHS
Markit
Purchasing Managers' Index™ (PMI™) data are compiled by IHS Markit for more than 40 economies worldwide. The monthly data are derived from surveys of senior executives at private sector companies, and are available only via subscription. The PMI dataset features a headline number, which indicates the overall health of an economy, and sub-indices, which provide insights into other key economic drivers such as GDP, inflation, exports, capacity utilization, employment and inventories. The PMI data are used by financial and corporate professionals to better understand where economies and markets are headed, and to uncover opportunities.
