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Big Feb PMI Beat Led By Services Strength


A big beat for February UK flash PMIs, with 8-month highs for both Composite (53.0 vs 49.0 expected, 48.5 prior) and Services (53.3 vs 49.2 expected, 48.7 prior), and a 7-month high for Manufacturing PMI (albeit still in contractionary territory at 49.2, vs 47.5 expected, 47.0 prior).

  • Overall a very solid report across the board, particularly for the services sector, with inflationary dynamics and weaker manufacturing new orders the main concerns.
  • From the S&P Global / CIPS report: "Survey respondents cited rising customer demand and improving business confidence in February, due to lower economic uncertainty, fewer supply shortages and falling inflation."
  • Overall new orders rose for the first time in 7 months, though that was due to a solid upturn in services, vs a slight drop for manufacturers.
  • The rate of job creation rose the fastest since October, due largely to services hiring. Respondents reported difficulties finding suitable candidates, "despite higher starting salaries".
  • While input costs increased the least since April 2021, prices charged inflation eased "only fractionally, especially in the service economy", as many respondents said they needed to pass on "higher wages, food costs and energy bills".

Source: S&P Global, CIPS, ONS

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