Services sector looks to rebound

Johnson Reed
2m read
Service sector rebound

There is great news coming out of the Services sector including Hospitality, Retail and Catering. As per The Times, the Purchasing Managers Index (PMI) for the Services sector, which gives a good indication in regards to the general direction of the sector by measuring the market conditions rose for the third month in a row to 62.6, up from 60.5 in February 2022. With ’50’ set as the sign of a market “contracting”, the latest figures show really promising times ahead for this sector. To match the increase in consumer demand, following the relaxing of Covid restrictions at the end of January this year, output in the services sector has been the highest figure in the past 10 months.

Although, current events in the Ukraine, and the uncertainty that has left in the global economy, has caused a slight dip in business confidence which has resulted in predicted sales falling again for the second consecutive month and sales prediction being at at their lowest since October 2020. Cost pressures on firms have also seen inflation in the rate of prices charged by businesses at its highest since the index began in July 1996.

Whilst on the surface this does not seem like good news, actually this inflation is a sign of economic growth and Martin Beck, chief economic adviser to the EY Item Club, suggests that “Momentum in the economy at the start of the year means warnings of recession presently look overblown”, which can provide businesses and consumers a little bit of certainty that things are not doomed for the remainder of the year!

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