The UK's private sector experienced a second consecutive month of contraction in May, as indicated by the S&P Global/CIPS purchasing managers' index (PMI), which rose slightly to 49.4 but remained below the 50 mark. This follows a strong Q1 growth of 0.7%. While the services sector showed some resilience by exceeding 50 at 50.2, the manufacturing sector suffered a decline, evidenced by a PMI of 45.4. Rising trade issues, increased costs, and ongoing inflation fears create an uncertain economic outlook, potentially reversing growth trends.
Although brighter news on tariffs and trade appears to have helped restore some confidence among businesses, sentiment about prospects in the year ahead is still subdued.
The PMI figures indicate that manufacturing production fell at its fastest rate in seven months, with concerns about rising trade uncertainty, higher staff costs and persistent inflation.
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