The latest survey from S&P Global/CIPS showed that business activity in the private sector improved in July, and reached a 2-month high, supported by the sharpest upturn in new business for 15 months and a strengthening of business confidence.
The UK composite PMI rose to 52.7 points from 52.3 points in June. Consensus estimates suggested an increase to 52.6 points. The index remains above the 50-point mark, which indicates an expansion of activity in the private sector, for the ninth month in a row. The services PMI rose to 52.4 points (2-month high) from 52.1 points in June, while the manufacturing PMI rose to 51.8 points (24-month high) from 50.9 points. Economists had expected the services PMI to rise to 52.5 points and the manufacturing PMI to reach 51.1 points.
Data showed that new orders in the private sector rose again in July, with the pace of growth being the strongest since April 2023. Demand from overseas also improved, with firms indicating the fastest uplift in new export orders for 16 months. Private sector employment continued to grow in July, recording the strongest growth in a year. As for the inflationary situation in the private sector, input price inflation was among the softest observed since the beginning of 2021. Prices charged inflation slowed to its weakest since February 2021, driven by a softer increase in output charges at services companies. That said, the rate of inflation was still above its long-run trend. The data also showed that business confidence rebounded in July, and was only slightly below the two-year high seen in February.