UK private sector output growth hits six-month high
By Michele Maatouk
Date: Monday 24 Mar 2025
(Sharecast News) - Output growth in the UK private sector hit a six-month high in March, thanks to a rebound in the services sector, according to a survey released on Monday.
The S&P Global flash UK PMI composite output index rose to 52.0 from 50.5 in February, coming in above the 50.0 mark that separates contraction from expansion for the seventeenth month in a row. This marked the highest reading since September 2024.
The survey revealed the fastest upturn in the service economy since August 2024, with growth in the sector boosted by renewed improvements in both domestic and overseas sales.
The flash UK services PMI business activity index rose to 53.2 in March from 51.0 the month before.
However, manufacturers experienced severe headwinds to demand from rising global economic uncertainty and potential US tariffs, S&P said.
Weak international demand resulted in the fastest decline in manufacturing export sales since August 2023. Manufacturers reported the steepest downturn in production volumes for nearly one-and-a-half years.
The flash manufacturing output index fell to a 17-month low of 44.6 in March from 47.3 the month before.
Chris Williamson, chief business economist at S&P Global Market Intelligence, said: "An upturn in business activity in March brings some good news for the government ahead of the Chancellor's Spring Statement, offering a respite from the recent flow of predominantly downbeat economic data. However, just as one swallow does not a summer make, one good PMI doesn't signal a recovery.
"The signal from the flash PMI is an economy eking out a modest expansion in March, consistent with quarterly GDP growth of just 0.1%, but with employment continuing to be cut thanks to concern over costs and the uncertain outlook. Confidence is still running close to January's two-year low.
"The improvement is also being driven by only small pockets of growth, notably in financial services, with consumer-facing business and manufacturers continuing to struggle against headwinds both at home and abroad.
"These headwinds include the additional costs imposed on businesses in the Budget, low confidence among businesses and households, and sluggish demand at home and abroad, the latter linked to heightened geopolitical uncertainty resulting from US tariff policies.
"Worryingly, these headwinds are likely to grow in force as higher National Insurance contributions come into effect in April, coinciding with the anticipated review of US tariff policy on 2nd April, the latter having the potential to further subdue global economic growth and dampen UK trade."
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