Source: Sharecast
The S&P Global UK services PMI business activity index came in at 50.9 in May, ahead of consensus and the flash reading of 50.2.
It was also a notable improvement on April’s 27-month low of 49.0.
A reading below the neutral 50.0 benchmark suggests contraction but one above it indicates growth.
As a result, the PMI composite output index – a weighted average of the manufacturing and services indices – also moved into positive territory, rising to 50.3 from 48.5, despite ongoing weakness in manufacturing. The manufacturing PMI, which was released on Monday, remains in contraction at 46.4.
Respondents to the service sector survey reported improved confidence among clients, including fewer issues surround tariffs.
Higher costs, however, continued to weigh on demand overall, with total new work decreasing for the fourth time in five months.
Tim Moore, economics director at S&P Global Market Intelligence, said: “The service sector regained its poise in May, as receding concerns about US tariffs, recovering global financial markets and greater confidence among clients all helped to support output growth.
“Output growth expectations for the year ahead also rebounded after April’s tariff-related slump.”
However, he also acknowledged that prevailing demand conditions “nonetheless remained challenging”, with cutbacks in discretionary spending by both businesses and consumers.
Data were collected between 12 and 28 May, with questionnaires sent to a panel of around 650 service sector companies.