BRUSSELS (dpa-AFX) - The UK service sector contracted in May as output levels dropped for the first time in just over a year, final survey results from S&P Global showed Wednesday.
The final services Purchasing Managers' Index dropped to 49.3 in May from 52.7 in April. The flash reading was 47.9.
The score registered below the 50.0 no-change level for the first time since April 2025.
'UK service sector companies signaled a reversal of fortunes in May as business activity fell into contraction after showing some resilience earlier this spring,' S&P Global Market Intelligence Economics Director Tim Moore said.
There was a reduction in new work but the rate of contraction was only marginal. Export sales also weakened in May due to unfavourable global economic conditions and intense competition in major export markets.
Further, the rate of backlog depletion was the fastest since November 2025. Data showed a solid reduction in payroll numbers, with the pace of job shedding the biggest since February.
Cost pressures continued to remain strong in May. The rate of inflation eased only slightly from April's 41-month high. Output charge inflation continued to rise but eased from April's 39-month peak.
Business activity expectations for the year ahead were the least upbeat since April 2025 as many firms were concerned about the impact of the Middle East conflict on inflation.
The survey showed that the overall private sector contracted for the first time in 13 months. The composite output index posted 49.7 in May, down from 52.6 in April. The initial score was 48.5.
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