UK private sector output falls for second month - PMI
By Abigail Townsend
Date: Thursday 22 May 2025
(Sharecast News) - The UK private sector remained in negative territory in May, a closely-watched survey showed on Thursday, although the pace of decline slowed.
The latest flash S&P Global UK PMI composite output index was 49.4, below the neutral 50.0 though it was an improvement on April's 48.5.
A reading above 50.0 indicates growth, while one below it suggests contraction.
Within that, the services PMI business activity index pushed into positive territory, up from 49.0 to 50.2, but manufacturing stalled. The output index eased to 44.8 from 45.8, while the PMI was 45.1 compared to 45.4 a month earlier.
Business activity expectations for the coming year improved, however, up from the low seen in April. That was despite a faster reduction in new order intakes during the month.
Anecdotally, respondents were less concerned about the impact of US tariffs on longer-term domestic economic prospects, although global business uncertainty continued to weigh on confidence.
Chris Williamson, chief business economist at S&P Global Market Intelligence, said: "After an awful April, businesses reported a milder May.
"Business confidence has rebounded from April's recent low, which had seen confidence collapse to a degree not seen since the Truss budget of 2022, and price pressures have moderated after spiking higher.
"However, output still fell slightly when measured across all goods and services for a second successive month, hinting at the possibility of the economy contracting in the second quarter."
Matt Swannell, chief economic advisor to the EY Item Club, said: "The PMIs can be volatile from month-to-month, and the survey has been a poor leading indicator of official GDP growth in recent years. This is largely because the survey tends to pick up changes in mood better than changes in actual activity. Though GDP growth will likely slow in the second quarter, we think it will remain comfortably in positive territory."
The data were collected between 12 and 20 May. Surveys were sent to panels of around 650 manufacturers and 650 service providers.
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