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British Services PMI Increases Further

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British Services PMI Increases Further

The British Services Purchasing Managers Index (PMI) has just been published for the month of April. The headline figure shows 58.7, up on last month’s 57.6, consensus estimates were for no real change on this March number.

The European Commission (EC) yesterday published it’s Spring 2014 growth forecasts for all EU countries. The EU, the Eurozone 18 and many individual economies all underwent a reduction in predicted GDP growth according to EC projections. Britain however was one of the few nations to experience an upgrade in it’s prospects. The EC had previously forecast British growth at 2.5% in 2014 and 2.4% in 2015, these targets have now been upgraded to 2.7% and 2.5% respectively.

The success of the UK recovery is backed up by a PwC report which projects up to 2.8% expansion in the UK this year. A result like this would place Britain top of the table of G7 countries in terms of GDP growth in 2014.

Further encouraging news from the EC suggests that the British recovery is becoming more balanced. This is an important factor as the initial stages of the UK’s emergence from the crises were fuelled largely by domestic consumer activity. Investment in the manufacturing and services sectors in particular have been singled out as being neglected. Today’s increase in the PMI number offers support to the EC’s statement that recovery is now reaching other sectors of the British economy.

There is still however some way to go to engage all sectors equally in the recovery process. British consumers are still reducing their levels of savings in order to fund purchases and are likely to continue to do so through out 2015. Further efforts to broaden the recovery are required in order to ensure that the relatively impressive growth rates being experienced by the UK become ingrained and therefore more sustainable.

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