UK private sector growth reaches highest level since late 2013

According to the report from IHS Markit/CIPS, April PMI data illustrated a strong revival in UK private sector output after the downturn seen at the start of 2021 during the full national lockdown. Moreover, for the first time since the COVID-19 pandemic began, service activity growth outperformed manufacturing production. This was largely due to a boost from easing government stringency measures regarding some consumer services and non-essential retail in England and Wales from mid-April, with Scotland and Northern Ireland set to follow similar reopening paths by the end of this month.

At 60.0 in April, up from 56.4 in March, the headline seasonally adjusted IHS Markit / CIPS Flash UK Composite Output Index registered above the 50.0 no-change value for the second month running and moved further ahead of January's recent low (41.2). The latest reading signalled the strongest overall increase in UK private sector output since November 2013.

Service activity (index at 60.1) expanded to the greatest extent since August 2014, while manufacturing production growth accelerated to its fastest for eight months. Survey respondents overwhelmingly attributed higher levels of output to the improving pandemic situation and confidence towards the sustainability of the recovery in the months ahead.

The index measuring business expectations for the next 12 months held close to the series-record high seen in March. Positive sentiment about the UK economic outlook helped to boost private sector employment during April. Latest data pointed to the steepest rate of job creation since August 2017 and comments from survey respondents mostly noted additional staff hiring as opposed to the impact of recalls from furlough.