LONDON (dpa-AFX) - UK private sector output expanded at the slowest pace in four months in September amid deceleration in services growth along with continued contraction in the manufacturing production, flash survey results from S&P Global revealed on Tuesday.
The composite output index dropped to 51.0 in September from August's 1-year high of 53.5. Nonetheless, a score above 50 indicates expansion in the sector. The expected reading was 53.0.
Higher levels of service sector activity once again contrasted with cutbacks to manufacturing production, the survey said.
The services Purchasing Managers' Index declined to 51.9 from 54.2 in the previous month. The score was forecast to fall to 53.5.
The factory PMI decreased to a 6-month low of 45.4 in September from 49.3 a month ago.
The growth in new orders in the British private sector has moderated since August amid weaker expansion in the service economy. Export orders declined at the fastest pace in five months due to falling sales to the US and Europe.
Companies continued to reduce workforce numbers, linked to hiring freezes and the non-replacement of voluntary leavers in response to strong cost pressures and reduced workloads.
On the price front, input price inflation eased slightly from August's 3-month high but remained well above the pre-pandemic average.
Looking ahead, firms remained confident about expected business activity over the next twelve months. However, the degree of confidence eased to a three-month low due to weak client confidence alongside heightened political and economic uncertainty.
'With the weakening of business activity growth to a rate consistent with the economy almost stalling, and around 50,000 job losses being signaled by the PMI again in the three months to September, alarm bells should be ringing that the economy is faltering, which could help shift the policy debate at the Bank of England back towards a more dovish stance,' Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, said.
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