UK business growth slows in May – PMI

British business growth slows more than expected in May, dealing an early setback to Prime Minister Rishi Sunak’s election campaign, according to a survey released on Thursday cited by Reuters.

The S&P Global UK Composite Purchasing Managers’ Index (PMI) for both services and manufacturing sectors dropped to 52.8 in May from 54.1 in April, falling below the median poll forecast of 54.0. Readings above 50 indicate expansion.

The services sector reported its weakest growth in six months, offsetting a recovery in factories, which had their best month in nearly two years.

The PMI suggests a loss of momentum in Britain’s economy after a strong start to 2024, exiting a shallow recession. S&P Global indicated that the survey corresponds to economic output growing at a quarterly rate of 0.3 per cent, down from a 0.6 per cent expansion in the first quarter.

New orders grew at the slowest pace this year. The composite PMI’s index of companies’ cost pressures dropped to its lowest since October.

The services PMI fell to 52.9 in May from April’s 11-month high of 55.0, below the consensus of 54.7 in a Reuters poll. The manufacturing PMI rose to its highest since July 2022 at 51.3, up from 49.1 in April, boosted by rising output and new orders.