(Bloomberg) -- UK companies signaled a return to growth in the first quarter and are the most confident they’ve been since the start of Russia’s invasion of Ukraine.

S&P Global said its composite purchasing managers’ index edged lower to 52.2 in March from 53.1 the month before, suggesting that the economy has avoided a recession for now. 

The figures add to evidence that the UK economy is holding up stronger than expected against a barrage of headwinds, including higher interest rates and a cost-of-living crisis. The Bank of England also said on Thursday that it is growing more hopeful that the economy will eek out growth in the first half. 

“The bigger picture is that the improvement in order book growth adds to signs that a near-term recession has been avoided,” Chris Williamson, chief business economist at S&P Global Market Intelligence, said in a statement Friday. “An upturn in companies’ expectations for the year ahead indicates that business sentiment has been little affected so far by the banking sector woes. Firms are more focused on growth possibilities.”

New business in the services sector, the engine of the UK economy, increased at the fastest pace in 12 months. However, the manufacturing PMI declined further into contraction territory from 49.3 to 48 even as cost pressures eased.

S&P Global said the PMIs suggest a “modest” 0.2% rise in GDP in the first quarter after a flatlining end to 2022. Any reading above 50 signals growth, and the survey has shown an improving picture in recent months.

The survey pointed to confidence at its highest level in a year and cooling price pressures.

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