Investing.com — UK service sector activity growth weakened sharply in March, with the S&P Global UK Services PMI Business Activity Index falling to 50.5 from 53.9 in February, marking the slowest expansion in 11 months, according to data released Tuesday.
The reading came below the earlier flash estimate of 51.2 and represented the weakest rise in output since April 2025. Service providers linked the slowdown to falling business and consumer spending amid concerns about the war in the Middle East.
New business declined for the first time since November 2025, with the pace of contraction the sharpest in eight months. Export sales fell at the fastest rate since April 2025 as regional instabilities and rising global economic uncertainty weighed on client confidence and delayed investment decisions.
Input price inflation accelerated to its highest level since April 2025, driven by higher fuel, transportation and raw material costs. Around 40% of firms reported increased input costs in March, while only 2% noted a decline.
Service providers raised output charges at the strongest pace in 11 months in response to rising operating expenses.
Employment continued to decline, though the reduction was the slowest since October 2025. Firms cited sufficient capacity to meet workloads despite international shipping delays and worsening supply chain performance.
Business optimism fell to its lowest level in nine months as firms expressed concerns about the duration of the Middle East conflict and its impact on inflation, supply chains and borrowing costs.
The S&P Global UK Composite Output Index, which combines manufacturing and services data, dropped to 50.3 from 53.7 in February, indicating only marginal growth in private sector output.