The latest survey from S&P Global/CIPS showed that business activity in the private sector decreased in October, reaching an 11-month low, while output growth slowed in both manufacturing and services sectors. Survey respondents widely commented on the impact of delayed decision-making among clients and heightened economic uncertainty.
The UK composite PMI fell to 51.7 points from 52.6 points in September. Consensus estimates suggested that the index will remain unchanged. But the index remains above the 50-point mark, which indicates an expansion of activity in the private sector, for the 12th month in a row. The services PMI dropped to 51.8 points (11-month low) from 52.4 points in August, while the manufacturing PMI fell to 50.3 points (6-month low) from 51.5 points. Economists had expected the services PMI to remain at 52.4 points and the manufacturing PMI dropped to 51.4 points.
Data showed that new orders in the private sector grew at the weakest pace since June. Resilient demand in the service economy contrasted with an outright decline in new work received by manufacturing firms. The backlog of work decreased for the eighth consecutive month, suggesting a lack of pressure on business capacity. Meanwhile, total private sector employment decreased for the first time since December 2023, albeit only marginally. This was led by the sharpest reduction in service sector workforce numbers for 13 months. Business activity expectations for the year ahead declined again, reaching the lowest level since November 2023. Weaker growth projections were seen in both the manufacturing and service sectors in October. As for the inflationary situation in the private sector, the rate of prices charged inflation rose to a 3-month high, while the latest increase in average input prices was the slowest since November 2020.