- Services PMI 52.9 vs. 54.7 expected and 55.0 prior.
- Manufacturing PMI 51.3 vs. 49.5 expected and 49.1 prior.
- Composite PMI 52.8 vs. 54.0 expected and 54.1 prior.
Key Findings:
- Flash UK PMI Composite Output Index at 52.8 (Apr: 54.1). 2-month low.
- Flash UK Services PMI Business Activity Index at 52.9 (Apr: 55.0). 6-month low.
- Flash UK Manufacturing Output Index at 52.7 (Apr: 49.4). 25-month high.
- Flash UK Manufacturing PMI at 51.3 (Apr: 49.1). 22-month high.
Comment:
Commenting on the flash PMI data, Chris Williamson, Chief Business Economist at S&P Global Market Intelligence said:
“The flash PMI survey data for May signalled a further expansion of UK business activity, suggesting the economy continues to recover from the mild recession seen late last year. The survey data are consistent with GDP rising by around 0.3% in the second quarter, with an encouraging revival of manufacturing accompanied by sustained, but slower, service sector growth.
“The survey also brings welcome news of a cooling in service sector inflation, which is needed to open the door for the Bank of England to start cutting interest rates. A temporary surge in wage-related cost growth seen in April is showing signs of fading in May. Firms are also reporting that strong competition is limiting their scope to raise prices, especially in the face of weakened demand due to the elevated cost of living.
“With companies now reporting the slowest price growth in over three years, and headline inflation falling close to target, the PMI data support the view that the Bank of England will start cutting interest rates in August providing the data continue to move in the right direction over the summer.
“Such speculation of rate cuts has already fed through to improved business confidence, with optimism for the year ahead lifting higher in May, adding to hopes that the battle against inflation can be won without the UK having suffered a serious recession.”
