For people investment planning in Cheshire’s services sector, new figures have given an indication of its strength. The data from S&P Global shows how, nationally, it has offset a decline in manufacturing.
In August, private sector output put in its strongest performance in a year. New business volumes expanded at the ‘strongest pace’ since October 2024. The news was warmly welcomed by the Treasury, although some higher input prices could result in higher bills. The S&P Global Composite index recorded 53 in August, which was up from 51.5 in July. It remained above the neutral 50 mark for the fourth month in a row. At the same time, the UK Services PMI Business Activity Index rose 51.8 in July to 53.6 in August. This helped offset a decline in Manufacturing PMI from 48 to 47.3.
Leading economist Martin Beck from EPI Strategy said the figures indicated GDP growth of 0.4% in Q3. His view is that established forecasts on growth have been too pessimistic. Moreover, as COVID and the energy price shocks recede into memory, people are now seeing real wage rises and interest rate cuts. These should motivate consumers and businesses alike to save less and spend more.
However, other economists have sounded a more cautious note about the fragility of economic confidence. With inflation still above Threadneedle Street’s 2% target and higher national insurance contributions for employers, there are elevated cost pressures across the economy. More data is needed to get a better idea of the country’s economic health.
