UK services sector records highest reading since 2013


  • The UK Services PMI rose to 61 in April 2021, the highest reading since October 2013
  • The IHS Markit/CIPS Services PMI was at 56.3 in March 2021
  • Overall growth was adequately supported by rising confidence in sustainable recovery

Continuing the growth trend in 2021, the UK services sector bounced back sharply in April, largely driven by a meaningful surge in the consumer, as well as business spending. According to the IHS Markit/CIPS, the UK Services PMI rose to 61 in April 2021, the highest reading since October 2013 as business sentiments recovered following the implementation of planned easements and further relaxations lined in the upcoming weeks. The IHS Markit/CIPS Services PMI was at 56.3 in March 2021. 

A considerable improvement in the demand, high levels of optimism on the back of improved economic outlook in the near term and gradually diminishing pandemic restrictions remained the major factors for driving the demand, the survey conducted by the IHS Markit/CIPS said.

The overall growth in the services sector was adequately supported by the rising confidence in the sustainable recovery with the commercial settings increasing the staff hiring. Led by the sharp uptick in hiring ahead of the reopening in phased manner, the employment growth in the reporting month accelerated to its fastest pace since October 2015.

  1. The exit roadmap, laid out by the Prime Minister Boris Johnson, for easing the pandemic-induced restrictions has substantially helped boosting the activity across the nation.
  2. The services sector has been partly bolstered by the resumption of a number of customer-facing parts of the economy in April itself.
  3. The rate of expansion was the steepest since December 2013 with new order volumes increasing for the second month in a row.
  4. Strong confidence among the businessowners and worthwhile improvement in the Covid-19 pandemic situation has helped in forward bookings and the onset of new projects.
  5. Cross-border sales remained lacklustre in April 2021, largely due to the curtailed international travel and reluctance among the international clients due to the evolving nature of pandemic.
  6. However, enlarged demand from the overseas clients in the United States and Asia led to an increase in the exports. Moreover, there has been a marginal growth in the new work from abroad.
  7. Unfinished business multiplied at the steepest rate since March 2015, defying the comprehensive efforts put in by the enterprises to rebuild commercial capacity.
  8. According to the survey, staff shortages within the organisations and better-than-expected demand emerged as the primary reasons for the rise in commercial backlogs.
  9. The service sector firms are anticipating a sharp upturn in the business activity as the consumer sentiments improve over the course of next 12 months.
  10. This has been the first time since February 2020 when the output across the service sector grew at a stronger rate as compared to the manufacturing production.