The UK economy is continuing to show signs of recovery, with both manufacturing and services firms seeing sales accelerate in July.
S&P’s ‘flash’ purchasing managers’s index (PMI) for July, based on survey responses from around 650 manufacturers and 650 service providers, showed the sharpest upturn in new business for 15 months and a strengthening of business confidence after a dip in June.
Companies reported an improvement in market confidence and new contracts being secured. Demand from overseas also increased, with the fastest uplift in new export orders for 16 months.
The manufacturing sector saw the strongest increase in activity, as production levels rose for the third month running following a lengthy downturn.
After falling to a six-month low in June, business confidence rebounded in July and was only slightly below the two-year high seen in February. Manufacturing and services firms alike were more optimistic about future business activity, amid expectations of improving demand conditions, stronger business investment, interest rate cuts and political stability.
The headline PMI rose for a ninth consecutive month to 52.7 in July, from 52.3 in June, with all measures above 50 indicating growth.
Chris Williamson, chief business economist at S&P Global Market Intelligence, said that the monthly data pointed to “an encouraging start to the second half of the year, with output, order books and employment all growing at faster rates amid rebounding business confidence, while price pressures moderated”.
