The United Kingdom’s private sector was reduced for the second consecutive month in May, feeding with which the strong start of the economy could be the year in the second quarter.
The Global/Cips Tuys Managers’ Index (PMI) s It marks the second lowest reading in the last 17 months and underlines the fragile status of commercial conditions.
PMI figures occur only one week after official data showed that the economy had grown 0.7 percent in the first quarter, its fastest pace in two years. But that impulse now seems to be stagnant in the midst of the growing commercial uncertainty, the greatest costs of personnel and persistent inflationary conerns, which increases the perspective of a potential reversal in Q2.
While the United Kingdom’s services sector, which represents more than three quarters of the economy, pressed a modest rebound, with its PMI marking up to 50.2 from 49.0, the manufacturing sector continues to deteriorate. His PMI fell to 45.4, a minimum of two months, signing the strongest decrease in production since October 2023.
Manufacturers have a bone particularly affected by the commercial environment after Brexit, delayed investment decisions and cuts for non -hidden spending. The report found that the general manufacturing production fell at its fastest rate in seven months.
“Although the brightest news about rates and trade seems to have trust among companies, the feeling about perspectives in next year is still subjected,” said Chris Williamson, chief economist of S&P global.
PMI data also point to a wave or aggressive employment cuts, particularly in manufacturing, since companies fight with the increase in salary and tax invoices after April increases to the contributions of the national insurance and the minimum wage.
Despite a recent improvement in commercial feeling, AIDE for the partial commercial agreement of the United Kingdom with the United States and the 90 -day break of the Trump administration on new tariffs, Apars, that these developments have not yet translated or hiring confidence.
“The concerns about weak demand have been exacerbated in the leg for the increase in staff costs,” added Williamson.
Economics Capital Economists warned that PMI readings for April and May are consistent with a contraction of GDP or 0.2 percent in the second quarter, which would mark the quarterly performance of sausages since 2023.
The findings occur in the midst of broader signs of economic fragility throughout Europe. The PMI equivalent of the Eurozone fell into a negative territory this month, falling from 50.4 to 49.5, highlighting the shared pressures in advanced economies.
Although companies hope that recent improvements in global commercial conditions can offer some relief in the second half of the year, the latest PMI data add to the growing list of winds against which face the growth of the United Kingdom, including the highest costs of inputs, the cautious cost of the consumer and the persistent geopolitical risks.
As the government prepares for its next expenses review, and the Bank of England weighs more interest rates decisions, the latest figures will probably reinforce the supporting calls directed to protect jobs and stimulate investment, particularly in the industrial sector in difficulties.
