UK business growth increased to a six-month high this month and boosted hopes that the economy will dodge a recession, according to an influential survey.
The closely followed S&P Global/CIPS flash UK purchasing managers’ index (PMI) reported a reading of 51.7 for December, up from 50.7 in November.
Any reading above 50 indicates the sector is growing. The flash figures are based on preliminary data.
The report said this meant Britain’s private sector continued its “modest recovery” after a downturn in the three months to October.
Economists involved in the survey said this could point towards the UK avoiding a technical recession – which means two consecutive quarters of decline.
Chris Williamson, chief business economist at S&P Global Market Intelligence, said: “The UK economy continues to dodge recession, with growth picking up some momentum at the end of the year to suggest that GDP stagnated over the fourth quarter as a whole.
“While employment, meanwhile, fell for a fourth month, the decline was only marginal and not indicative of any material rise in unemployment.”
Firms in the survey highlighted “tentative signs of a revival in customer demand”, particularly in the technology and financial services sector.
The pick-up in activity for the month was driven by stronger growth in the services sector.
The survey reported a reading of 52.7 for the services industry, representing a six-month high.
Meanwhile, the manufacturing sector saw activity drop, recording a 46.4 reading, reflecting the tenth consecutive month of decline.
John Glen, chief economist at CIPS (the Chartered Institute of Procurement & Supply), said: “UK manufacturing will be glad to see the back of 2023.
“Overstocked customers mean December is yet another month of decreasing production levels and reducing output volumes for the manufacturing sector.
“Despite an easing of supply chain pressures there was little relief from overseas markets, with export sales declining sharply.”
The latest survey also revealed that staffing numbers fell in December for the fourth month in a row amid pressure from economic uncertainty.
Why are you making commenting on The National only available to subscribers?
We know there are thousands of National readers who want to debate, argue and go back and forth in the comments section of our stories. We’ve got the most informed readers in Scotland, asking each other the big questions about the future of our country.
Unfortunately, though, these important debates are being spoiled by a vocal minority of trolls who aren’t really interested in the issues, try to derail the conversations, register under fake names, and post vile abuse.
So that’s why we’ve decided to make the ability to comment only available to our paying subscribers. That way, all the trolls who post abuse on our website will have to pay if they want to join the debate – and risk a permanent ban from the account that they subscribe with.
The conversation will go back to what it should be about – people who care passionately about the issues, but disagree constructively on what we should do about them. Let’s get that debate started!
Callum Baird, Editor of The National
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules hereLast Updated:
Report this comment Cancel