The S&P Global flash UK composite purchasing managers’ index (PMI) has reported a slump across the UK’s private sector that continued into May.
This was a slower rate compared to April and confidence has improved as the US tariffs have eased.
The PMI reported a reading of 49.4 in May, compared to 48.5 the previous month, any figure above 50 shows that activity is growing.
Manufacturers reported the fastest rate of job cuts as the Chancellor’s employer’s national insurance increase and minimum wage has had an impact on the sector, despite Labour saying jobs will not be impacted.
Chris Williamson chief business economist at S&P Global Market Intelligence, said, “After an ‘awful April’, businesses reported a milder May.
“Sunny weather also provided a welcome boost to business activity in some parts of the economy.
“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.
“Furthermore, 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.
“Job cutting consequently remains worryingly aggressive, especially in manufacturing, as concerns about weak demand have been exacerbated by the rise in staff costs linked to the national insurance and minimum wage changes that came into effect in April.”
