UK Private Sector Activity Revised Lower

The UK S&P Global Composite PMI rose to 53.7 in January of 2026 from 51.4 in the previous month, revised slightly downward from the preliminary estimate of 53.9 but remaining sharply above the initial market expectations of 51.5. The result reflected the sharpest expansion in the UK private sector output, supported by both the services sector (54 vs 51.4 in December 2025), while that for manufacturers rose markedly to a 17-month high (51.8 vs 50.6). Total new orders received by the private sector rose to a third month in the last four, supported by an improvement in export sales. However, rising labor costs drove private sector job counts to fall at a faster pace. On the price front, input cost inflation slowed compared to the end of the previous year, but improving demand conditions drove output charges to accelerate. Looking forward, business activity expectations improved for a second straight month.

The UK S&P Global Composite PMI rose to 53.9 in January of 2026 from 51.4 in the previous month, well above market expectations of 51.5 to mark the sharpest growth in the UK private-sector activity since April of 2024, according to a flash estimate. Business activity surged for the services sector (54.3 vs 51.4 in December 2025), while that for manufacturers rose markedly to a 17-month high (51.6 vs 50.6). Total new orders received by the private sector rose to a third month in the last four, supported by an improvement in export sales. Despite the recovery in order books, firms reported a reduction in employment levels due to rising payroll costs and muted economic conditions, particularly for service providers, maintaining the trend from previous quarters. This drove input costs to accelerate the most in seven months, driving firms to raise output charges accordingly to protect margins. Looking forward, business activity expectations improved for a second straight month.

The UK S&P Global Composite PMI was at 51.4 in December of 2025, inching higher from 51.2 in the previous month but revised sharply lower from the preliminary estimate of 52.1 and missing the initial market estimates of 51.6. Still, the result reflected the eighth consecutive period of expansion in the British private sector activity with a slightly firmer expansion for services (51.4 vs 51.3 in November) and an extension to the rebound for manufacturers (50.6 vs 50.2), which was their highest reading in over one year. New work at the aggregate level rebounded moderately, but higher employment costs and uncertainty for future demand expectations drove employment numbers to fall at a robust pace. Likewise, input cost inflation accelerated for the second month to its highest since May, driving output charges to rise the most in four months.