Proactive Investors - The UK private sector returned to growth in November after three months of contraction, supported by a pick-up in the service sector, a report showed today.
A softer downturn in the manufacturing production also helped.
The headline seasonally adjusted S&P Global/CIPS flash UK PMI composite output Index registered 50.1, up from 48.7 in October and above the crucial 50.0 no change level.
The flash UK services PMI business activity index climbed to 50.5 (October 49.5), a four-month high, while the flash UK Manufacturing PMI at 46.7 (Oct: 44.8) was a six-month high
However, total new order intakes decreased for the fifth month running, which suggested that subdued underlying demand conditions persisted.
There were also renewed signs of sticky inflation in November as both input costs and average prices charged increased at faster rates than in October.
Service providers reported the sharpest rise in their average charges since July, which was overwhelmingly linked to higher staff costs.
Tim Moore, economics director at S&P Global Market Intelligence said the UK economy “found its feet again in November.”
But he cautioned that the survey’s forward-looking indicators suggested that recession risks will likely "remain elevated into the New Year, as new orders decreased for the fifth month running amid ongoing reports of subdued sales opportunities."
Samuel Tombs at Pantheon Macroeconomics was more opeful, believing the recovery in the composite PMI to above 50 for the first time since July provides reassurance that the economy is not on the brink of a recession.
“The data imply that aggregate demand is roughly flat, as growth in real wages and the resumption of cost-of-living payments to low-income households bolster consumer spending, offsetting ongoing weakness in the manufacturing sector caused by businesses running down inventories,” he said.