London: UK business activity growth accelerated for a third consecutive month in January this year, early purchasing managers’ index (PMI) survey data show, marking a promising start to the year. S&P Global Market Intelligence reveals.
The seasonally-adjusted S&P Global UK composite output index rose from 52.1 in December to 52.5 in January. Economists had anticipated a reading of 52.2.
The rise signals increased output for a third month running after three months of decline, boding well for the UK to avoid a recession, Chris Williamson, chief business economist at the company, wrote on the its website.
The data point to the economy growing at a quarterly rate of 0.2 per cent after a flat fourth quarter, therefore skirting recession and showing signs of renewed momentum.
Businesses have also become more optimistic about the year ahead, with confidence rebounding to its highest since last May.
At its current level, the PMI is broadly indicative of gross domestic product (GDP) growing at a quarterly rate of 0.2 per cent at the start of the year, Williamson wrote.
Manufacturing output, meanwhile, contracted for the eighteenth time in the past 19 months. The rate of decline hit the fastest since October last year and was broadly consistent with factory production falling at a steep quarterly rate of more than 2 per cent.
New orders for goods likewise declined at a markedly increased rate, partly due to falling exports. Manufacturers commonly cited weak demand both at home and abroad and the ongoing squeeze on households from the increased cost of living.
Manufacturing also reported growing issues with supply chains, amid intensifying disruptions to shipping in the Red Sea. There is also scope for the manufacturing supply chain situation to worsen further in the near term, Williamson observed.
Business confidence about the 12-month outlook rose to the highest since last May, also rising above the pre- pandemic average for the first time since May.
