UK Private Sector Activity Falls for 2nd Month

The S&P Global UK Composite PMI eased to 49.4 in June of 2026 from 49.7 in May, a second month of contraction following 11 months of expansion in the British private sector activity, according to a flash estimate. This was below expectations of an expansion at 50.6. Activity fell for services (48.7 vs 49.3 in May), outweighing the faster expansion for goods producers (53.6 vs 52.2). Total private sector sales fell the most since April 2025 as a decline in services offset growth in manufacturing, even though the latter slowed to a six-month low. Likewise, backlogs of work increased the most in seven months. Still, input price inflation eased for a second month as a modest de-escalation in the Middle East eased the upward pressure on energy prices, although cost growth remained above average. Output charge inflation also softened. Employment continued to fall at a fast rate, with workers still citing higher National Insurance contributions.

The S&P Global UK Composite PMI fell to 49.7 in May of 2026 from 52.6 in the previous month, revised higher from the preliminary estimate of 48.5, reflecting the first decline in activity in one year and firmly below the initial market expectations of an expansion of 51.6. Activity was lower for services providers (49.3 vs 52.7 in April), outweighing the faster expansion for goods producers (53.9 vs 53.7). New business at the aggregate level eased amid uncertainty for clients and weaker investment sentiment. A sharper decline was prevented by an influx of orders for manufacturers as clients attempted to beat price hikes risked by the war in the Middle East. Meanwhile, payroll numbers fell for the 20th month, with firms blaming higher National Insurance contributions for lower labor intake.

The S&P Global UK Composite PMI fell to 48.5 in May of 2026 from 52.6 in the previous month, reflecting the first decline in activity in over one year and firmly below market expectations of an expansion of 51.6, according to a preliminary estimate. Activity unexpectedly dropped for services providers (47.9 vs 52.7 in April), the lowest in over five years, outweighing the faster expansion for goods producers (52.4 vs 51.8). New business at the aggregate level amid uncertainty for clients and weaker investment sentiment. A sharper decline was prevented by an influx of orders for manufacturers as clients attempted to beat price hikes due shortly as the war in the Middle East lifted input cost inflation. The gauge eased slightly but remained well above the long-term average, and output charge inflation remained steady at a 3-year high. Meanwhile, payroll numbers fell for the20th straight month, with firms blaming higher National Insurance contributions.