UK Private Sector Growth Revised Slightly Higher

The S&P Global UK Composite PMI came at 52.0 in September 2026, revised slightly higher from the preliminary estimate of 51.7 but down from 52.5 in August, marking a three-month low. The slowdown reflected softer growth in both the services sector (52.1 vs 52.5 in August) and manufacturing (51.9 vs 51.7), although the latter continued to expand for an 11th consecutive month. New business growth also slowed to a marginal pace, while backlogs of work continued to decline, extending a trend seen since May 2023. On the price front, input costs for the private sector accelerated to their highest since June, largely due to higher energy, fuel and transport costs, pushing output price inflation higher. Employment fell marginally further despite positive projections for business activity. Looking ahead, business optimism eased from August but remained above its second-quarter average.

The S&P Global UK Composite PMI eased to 51.7 in September of 2026 from 52.5 in the previous month, slightly under market expectations of 52, according to a flash estimate. Still, the result marked a third month of expansion in British private sector activity after the surge in prices from the war in Iran triggered back-to-back contractions in May. Activity eased both for the services sector (51.7 vs 52.5 in August) and manufacturing (51.4 vs 52.1). Service providers noted that geopolitical uncertainty in the Middle East constrained orders, pressuring aggregate UK orders to ease, and contrasting with support from technology services. In turn, a group of manufacturers had sales supported by AI investment and defense spending. Meanwhile, employment fell for two straight years with firms still citing National Insurance costs. Also, input cost inflation hit a three-month high on widespread subsector increases, led by labor and fuel. Despite the headwinds, business optimism was unchanged.

The S&P Global UK Composite PMI rose to 52.5 in August of 2026 from 52.2 in the previous month, the same as the flash estimate and above the initial market expectations of 51.6. The growth was bolstered by fresh traction for the services providing sector (52.5 vs 52.1 in July), which offset a slowdown in the manufacturing sector (51.7 vs 51.9). New orders at the aggregate level improved sharply with businesses reporting a recovery in consumer spending and greater investment sentiment, even though export sales remained subdued. Still, staffing numbers dropped further to approach nearly two years of consecutive monthly declines, with employers continuing to cite surging labor costs due to new National Insurance contributions. Input costs for the private sector accelerated due to high fuel prices and wages, driving output charge inflation to rebound. Looking ahead, business expectations at the aggregate improved for a third month on improving margins since energy prices peaked in June.