UK business output rose at the fastest pace for more than two decades in May as the economy reopened and confidence strengthened, a survey showed.
The flash IHS Markit/CIPS output index rose to 62 from 60.7 a month earlier. May’s score was the highest since the survey began in January 1998. A score of more than 50 indicates growth.
Services activity rose to a 91-month high of 61.8 while the UK manufacturing purchasing managers’ index hit 66.1 – the highest reading since 1992. Both scores were “flash” figures that may be revised.
The jobs market had a strong pickup but cost pressures mounted and prices rose sharply, stoking concerns about inflation. Private sector employment rose at the fastest rate since June 2014 and costs rose at the sharpest pace for almost 13 years.
Chris Williamson, chief business economist at IHS Markit, said: “The UK is enjoying an unprecedented growth spurt as the economy reopens. Factory orders are surging at a record pace as global demand for goods continues to revive, and the service sector is reporting near-record growth as the opening up of the economy allows more businesses to trade. Business confidence has meanwhile hit an all-time high as concerns about the impact of the pandemic continue to fade.”
The figures add to a string of buoyant economic data as the UK economy reopens from three months of Covid-19 lockdown. Consumer confidence has returned to pre-pandemic levels and retail sales surged in April after non-essential stores were allowed to reopen, surveys showed on Friday.
Business expectations for the next 12 months edged up to a new record high during May, IHS Markit/CIPS said. The brighter outlooks was based on a surge in order books and a faster than anticipated recovery in demand.
Story originally appeared on fca.org.uk