UK Business Activity Growth Eases to Six-Month Low

The S&P Global UK Composite PMI fell to 51.0 in March 2026, down from 53.7 in February and below expectations of 52.9, according to preliminary data. This marks the slowest output growth since September 2025, as both services and manufacturing activity weakened. New business inflows declined for the first time in four months, with firms attributing the drop to falling confidence amid the Middle East conflict, rising inflation, and expectations of higher borrowing costs. Employment declined at a faster pace, and business confidence plunged to a nine-month low. On the price front, input cost inflation hit its highest since February 2023, with manufacturers reporting the steepest cost increases since October 2022 and the sharpest month-on-month acceleration since October 1992, just after the UK’s Black Wednesday. Output charges also surged, adding to cost pressures.

The S&P Global UK Composite PMI stood at 53.7 in February 2026, unchanged from January’s 17-month high but slightly below the preliminary estimate of 53.9. The reading signaled a solid expansion in private sector activity, extending the current growth streak to ten months. Manufacturing output rose at its fastest pace since September 2024, partly offsetting a marginal slowdown in services growth. However, employment fell again, marking a 17th consecutive monthly decline. Inflationary pressures eased somewhat, with both input costs and output charges rising more slowly than at the start of the year.

The UK S&P Global Composite PMI rose to 53.9 in February of 2026 from 53.7 in the previous month, ahead of market expectations of 53.3 for the highest reading since April of 2024, according to a preliminary estimate. Output growth rose to a 17-month high for manufacturers (53.6 vs 51.6 in January), while it remained at a historically elevated level for services providers (53.9 vs 54). New work at the aggregate increased at the strongest pace since September 2024, with firms citing improving sales pipelines and new consumer wins despite fragile economic conditions. Despite the higher orders, employment levels decreased further with employers blaming rising labor costs due to increased National Insurance contributions. The higher labor costs were combined with higher commodity prices to maintain input inflation elevated, driving output charge inflation to its highest in ten months. Looking forward, firms still signaled strong confidence in business activity for the next year.