PMI survey suggests ongoing growth in UK services sector

Revised data reaffirm hopes that UK recession could already be over while Eurozone PMIs paint a mixed picture.

5 March 2024

The UK final Services PMI for February was marked down marginally from the previous estimate, recording a revised reading of 53.8 (versus previous estimate of 54.3). It is a survey from 650 purchasing managers across the services industry which asks respondents to rate the relative level of business conditions, including employment, production, new orders, prices, supplier deliveries and inventories, with the combined score providing a picture of overall industry health. A figure over 50 indicates expansion in business conditions while conversely a figure below 50 indicates contraction. This is the third consecutive monthly Services PMI advance and raises the likelihood that the technical recession the UK experienced in the last half of 2023 has probably come and gone.

In comparison, European Services PMI numbers released shortly before the UK figure saw the Eurozone experience a more subdued expansion, with a reading of 50.2 as Italy and Spain’s stronger showings offset contractions in France and Germany. French industrial production fell by more than expected with a -1.1% slump month-on-month. Even if the UK was still part of the European Union, it would not be seen as the “sick man of Europe”. French and German calls for European Central Bank rate cuts can only get louder from here.