Key insights
- UK services sector growth edged up in April, but faces headwinds from rising fuel costs, supply shortages, and Middle East tensions. Input costs surged, leading to higher prices charged. Export sales declined, and employment continued to fall. Overall private sector output saw a moderate upturn, but inflationary pressures remain a concern.
Investing.com -- The UK services sector showed modest improvement in April, with the S&P Global UK Services PMI Business Activity Index rising to 52.7 from March’s 11-month low of 50.5, according to data released today.
The index remained above the 50.0 threshold, indicating expansion, though growth remained slower than at the start of 2026. The survey covered the period from April 9-28.
Service providers reported growth headwinds stemming from the Middle East conflict, with concerns about inflationary pressures, global supply shortages and elevated borrowing costs affecting business and consumer demand. Some firms noted resilient global demand for technology services.
New business remained broadly unchanged in April after declining slightly in March, contrasting with moderate growth seen in the first two months of 2026. Export sales fell at the fastest rate since April 2025, with firms citing business travel disruptions and softer client demand in the Middle East.
Employment across the service economy declined for the seventh consecutive month since October 2024, though the pace of job losses eased to its slowest in six months.
Input costs rose at the fastest rate since November 2022, with 57% of survey respondents reporting increased cost burdens in April, up from 40% in March. Higher fuel prices and wage pressures were the primary drivers, along with increased costs for raw materials including metals and plastics.
Service providers passed these costs onto customers through fuel surcharges and general price increases, pushing prices charged to their highest level since January 2023.
The UK Composite PMI Output Index, which combines manufacturing and services data, rose to 52.6 from 50.3 in March, indicating a moderate upturn in overall private sector output.