(Alliance News) - The strong expansion for UK service providers continued during May, helping to boost the country's private sector as a whole despite a weakening manufacturing sector, survey data showed on Monday.
The S&P Global/CIPS services purchasing managers' index edged down to 55.2 points in May from 55.9 in April. Remaining above the 50-point mark that separates growth from expansion, it shows the sector continued to expand, but at a marginally slower pace.
The strong second-quarter growth was fuelled by demand for consumer and technology services, and a "post-pandemic tailwind" of households opting for spending on services rather than goods, explained Tim Moore, S&P Global Market Intelligence economics director.
"Rising export sales were also reported in May, reflecting increased international visitor numbers and improving demand for business services from clients based in the US and Europe," he continued.
Job creation continued as firms recruited more staff to meet business needs, while wage pressures also persisted. The higher costs of salaries more than offset a decline in fuel costs, helping to drive up input price inflation to a three-month high.
The composite PMI - which weighs the manufacturing and services sectors combined - fell to 54.0 in May from 54.9 in April. Last Thursday, S&P Global said the manufacturing PMI fell to 47.1 from 47.8, indicating the downturn in the UK factory sector worsened slightly.
The UK services PMI is compiled by S&P Global from responses to surveys sent to purchasing managers at around 650 UK service sector companies, with data collected between May 11 and 26.
By Elizabeth Winter, Alliance News senior markets reporter
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