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Newsflash: Growth across the UK private sector is slowing this month, in a blow to the government’s election strategy.
Data firm S&P Global Insight’s regular poll of purchasing managers at British firms has found that the services sector is recording its weakest growth in six months during May.
More encouragingly, though, manufacturing has returned to growth – and firms are raising prices at the slowest rate in over three years.
Here’s the details:
Flash UK PMI Composite Output Index at 52.8 (down from April’s 54.1), to 2-month low.
Flash UK Services PMI Business Activity Index at 52.9 (down from April’s 55.0), to a 6-month low.
Flash UK Manufacturing Output Index at 52.7 (up from April’s 49.4), to a 25-month high.
Flash UK Manufacturing PMI at 51.3 (up from April’s 49.1), to a 22-month high.
Any reading over 50-points shows growth, so Rishi Sunak can at least point to that. But a slowdown in growth doesn’t bolster the PM’s claim the economy has “turned the corner”.
💥Another UK economic data miss: services PMI comes in worse than any economist polled by Reuters expected.
Bad timing for Rishi Sunak, even if the index is still handily above the 50 growth threshold.
— Andy Bruce (@BruceReuters) May 23, 2024
The PMI survey also found there was only a marginal increase in employment at companies this month, with some companies blaming candidate shortages and wage costs.
Chris Williamson, chief business economist at S&P Global Market Intelligence, says
“The flash PMI survey data for May signalled a further expansion of UK business activity, suggesting the economy continues to recover from the mild recession seen late last year. The survey data are consistent with GDP rising by around 0.3% in the second quarter, with an encouraging revival of manufacturing accompanied by sustained, but slower, service sector growth.
The survey also brings welcome news of a cooling in service sector inflation, which is needed to open the door for the Bank of England to start cutting interest rates. A temporary surge in wage-related cost growth seen in April is showing signs of fading in May. Firms are also reporting that strong competition is limiting their scope to raise prices, especially in the face of weakened demand due to the elevated cost of living.
May flash UK #PMI brings good news for #BoE of a cooling in service sector inflation. Firms are reporting that strong competition is limiting their scope to raise prices, especially in the face of…
2024-05-23 03:45:25
Original from www.theguardian.com