(Alliance News) - The UK service sector growth accelerated at a faster pace than expected, though the manufacturing economy remained in the doldrums, preliminary survey data showed Friday.
The UK S&P Global flash services purchasing managers' index rose to 51.1 points in February, from January's final tally of 50.8. Stretching further above the 50 point neutral mark to a two-month-high, the reading suggests service growth picked up. The services PMI landed above an FXStreet cited forecast of 51.1 points.
However, the manufacturing economy struggled. The flash manufacturing PMI fell to a 14-month low of 46.4 points, from January's final reading of 48.3 points. The reading was below consensus of 46.4, according to FXStreet.
The upshot of the readings was a composite PMI that was largely unchanged. The composite PMI slipped fractionally to a two-month low of 50.5 in February, from January's final reading of 50.6. The February flash was in line with consensus.
The composite PMI, a reading of the private sector, includes the manufacturing and services data.
"Service sector growth gained some momentum in February, but the overall pace of output expansion was much softer than the long-run survey average. Anecdotal evidence often cited a lack of new work to replace completed projects and cautious spending among clients in response to general concerns about UK economic prospects. Some service providers also noted that heightened global business uncertainty had weighed on growth in February," S&P Global said.
"Manufacturing output decreased for the fourth successive month in February and the pace of decline
accelerated since the beginning of 2025. Lower production was attributed to falling sales in both
domestic and overseas markets, alongside a lack of confidence regarding the near-term demand outlook."
Input cost inflation picked up for the fourth month on-the-spin, which S&P Global said was partly down to higher salary payments and suppliers looking to lift costs as they brace for an increase in employers' national insurance contributions. The NIC hike was announced in October's UK government budget.
S&P Global added: "Meanwhile, business activity expectations for the year ahead edged up from the 25-month low seen in January. This reflected improvements in business optimism among both manufacturers and service providers. Survey respondents typically reported a modest uplift in confidence regarding their own business expansion plans and sales pipelines, but also noted severe headwinds from the broader macroeconomic environment and rising geopolitical uncertainty."
Final February survey results for manufacturing are released on March 3, before the services and composite readings two days later. The survey features a panel of 650 firms in the UK, with the preliminary reading factoring in around 80% to 90% of the responses.
By Eric Cunha, Alliance News news editor
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