Data released by S&P Global/CIPS showed that activity growth in the UK private sector slowed again in November, reaching its lowest level since November 2023, reflecting a renewed downturn in manufacturing production, combined with softer service sector growth.
The UK composite PMI fell to 50.5 points from 51.8 points in October. Economists had expected a drop to 49.9 points. Meanwhile, the services PMI declined to 50.8 points (the lowest value since November 2023) from 52.0 points in October. Consensus estimates suggested a decrease to 50.0 points. Both indices remain above the 50-point mark, which indicates an expansion of activity in the sector, for the 13th month in a row.
The report showed that new orders in the services sector rose again in November, but the rate of expansion was only modest and the weakest recorded since the pre-election slowdown seen in June. Meanwhile, export orders also increased at a weaker pace in November, despite some reports of strengthening demand from US clients. Employment growth in the service sector fell slightly in November, albeit at a slower pace than in the previous month. Overall input cost inflation accelerated to the fastest since April, while the overall rate of prices charged inflation edged up to its highest since July. Meanwhile, business activity expectations for the year ahead decreased compared to October and reached a 23-month low. This was overwhelmingly linked to worries about higher payroll costs and subsequent declines in business investment.