PwC comments on January’s services PMI - Positive start to the year despite potential geopolitical shocks

Commenting on January’s UK Services PMI, Jenny Etherton, at PwC UK, said:

“January’s data shows that 2024 is off to a positive start with an injection of optimism for the UK services sector.

“Services activity grew again for the third month in a row as business and consumer confidence translated into new orders in anticipation of continued falls in inflation and interest rate cuts. 

“Despite this, we are seeing a continued flattening for recruitment, with ongoing wage pressures making a significant impact. However, some firms are bucking the trend by creating new jobs to ensure they have the capacity they need to meet stronger order books. 

“Input costs also continue to inch upwards due to higher salaries, although wage inflation was counterbalanced with lower fuel and raw material prices. 

“The improved optimism saw just over half of the survey panel forecast a rise in business activity in 2024, despite geopolitical uncertainty and a UK election later this year.

“However, with potential challenges due to wider international instability in the Middle East, the uptick in services demand from Asia and the US could easily be put at risk by a shock to global affairs.”