The latest survey from S&P Global/CIPS showed that business activity in the private sector deteriorated in September, reaching a 2-month low, while output growth slowed in both manufacturing and services sectors.
The UK composite PMI fell to 52.9 points from 53.8 points in August. Consensus estimates suggested a drop to 53.5 points. The index remains above the 50-point mark, which indicates an expansion of activity in the private sector, for the 11th month in a row. The services PMI dropped to 52.8 points (2-month low) from 53.7 points in August, while the manufacturing PMI fell to 51.5 points (3-month low) from 52.5 points. Economists had expected the services PMI to decline to 53.5 points and the manufacturing PMI to remain at 52.5 points.
Data showed that new orders in the private sector increased at a robust pace in September, led by strengthening order books across the service economy. However, new export orders remained relatively subdued, with total overseas sales rising only marginally. The data also showed that the backlog of work decreased for the seventh consecutive month. Meanwhile, employment growth in the private sector slowed again, and recorded the weakest increase since June. Business activity expectations for the year ahead remained upbeat and the degree of confidence edged compared to August, albeit with concerns about the impact of the Autumn Statement jangling nerves somewhat. As for the inflationary situation in the private sector, input price inflation increased at a robust pace and the rate of inflation picked up from August’s 45-month low. Latest data also indicated the slowest rise in average prices charged by private sector firms since February 2021.