A closely watched survey suggests that the UK will continue growing at a robust pace in the second half of the year as confidence in the economy continues to build.
S&P’s ‘flash’ purchasing managers’s index (PMI) came in at 53.4 in August, up from 52.8 last month and ahead of the 52.9 expected by economists.
PMIs, which measure business activity in the private sector, are closely watched for clues about the economy’s performance. The UK has now been above the 50 no-change mark for ten consecutive months.
“August is witnessing a welcome combination of stronger economic growth, improved job creation and lower inflation,” Chris Williamson, chief business economist at S&P Global Market Intelligence said.
“Both manufacturing and service sectors are reporting solid output growth and increased job gains as business confidence remains elevated by historical standards.”
Source: S&P
The survey pointed to a “robust upturn” in new orders from domestic markets, with clients more willing to spend due to softer inflationary pressures and lower borrowing costs.
On the back of stronger demand, the rate of employment growth accelerated to its fastest pace since last June. Survey respondents noted that increasing positivity about the domestic outlook had spurred efforts to boost business capacity.
The survey suggests that the UK will continue to grow at a decent clip in the remainder of the year, continuing the economy’s strong start to the year.
Figures out last week showed that the economy grew 0.6 per cent in the second quarter, confirming the UK’s position as the fastest growing G7 economy in the first half of the year.
More to follow