Strong UK June manufacturing activity offset by weakening services sector

LONDON (ICIS)–Strong UK manufacturing activity growth in June was offset by slowing expansion in the services sector, according to the latest Purchasing Managers’ Index (PMI) data.

Growth among goods producers, driven by improved order book intakes and strong business confidence, drove the manufacturing output and manufacturing indexes to 26- and 23-month highs respectively.

Conversely, services activity grew at its softest pace for seven months, with survey feedback indicating the slowdown was partly driven by a pause in client spending decisions in the run up to the UK election on 4 July.

UK PMI Indexes	June	May
Composite output	51.7	53.0
Services Business Activity	51.2	52.9
Manufacturing Output	54.2	53.4
Manufacturing	51.4	51.2

A figure above 50 in the index indicates expansion, and below 50 contraction.

UK firms also faced a quickening of input cost inflation in June as severe global shipping constraints led to higher transport costs, index compiler S&P Global said.

This rise fed through to quicker increases in output charges for both manufacturing and services companies, with producers raising prices at the sharpest rate since May 2023.

“The slowdown in part reflects uncertainty around the business environment in the lead up to the general election, with many firms seeing a hiatus in decision making pending clarity on various policies,” said S&P chief business economist Chris Williamson.

The latest PMI data for the eurozone indicated a slowdown in economic recovery at the end of the second quarter. Both data sets were released on Friday 21 June.