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UK private sector activity contracted for a second consecutive month in June as weakness in the services sector deepened, while manufacturing growth softened from May’s pace, according to flash survey data. The S&P Global flash UK composite output index fell to 49.4 points in June from 49.7 in May, marking a 14-month low and remaining below the 50.0-point threshold that separates growth from contraction. The reading missed the FXStreet-cited consensus forecast of 50.6 points. The downturn was driven by the services sector, where the business activity index fell to 48.7 points from 49.3, its lowest level in 41 months and below the FXStreet-cited consensus of 50.0. Manufacturing remained in expansion territory, although the headline manufacturing PMI eased to 53.1 points from 53.9, a three-month low and below the FXStreet-cited consensus of 53.6. However, manufacturing output growth strengthened, with the output index rising to 53.6 from 52.2, its highest level since September 2024. S&P Global said the latest data pointed to a marginal decline in output across the private sector economy. ‘The latest reading signalled a marginal reduction in private sector output for the second month running.’ According to respondents, service sector activity was hit by rising costs and weaker customer confidence, with many firms citing the conflict in the Middle East and domestic political uncertainty. Manufacturers, by contrast, continued to benefit from stockpiling by customers seeking to secure supplies ahead of potential price increases and disruptions. Chris Williamson, chief business economist at S&P Global Market Intelligence, said: ‘A disappointing June ’flash’ PMI indicates that the economy contracted for a second successive month, albeit at only a 0.1% rate and merely flat-lining over the second quarter as a whole.’ New business volumes fell for a fourth consecutive month and at the fastest pace since April 2025, reflecting weaker demand across the services sector and a slowdown in manufacturing order growth. Price pressures remained elevated despite easing for a second consecutive month. ‘Price pressures remain elevated as companies point to the energy shock and supply squeeze from the war in the Middle East as exacerbating existing cost pressures from government policies,’ Williamson said. ‘These higher costs, combined with subdued business growth expectations for the year ahead, have caused employment to continue to fall at a worryingly high rate.’ Business confidence improved from May’s recent low but remained weaker than levels seen before the outbreak of conflict in the Middle East. Williamson said much of the outlook depends on geopolitical developments. ‘For the growth and inflation outlooks, much depends on progress towards an end to the conflict in the Middle East, but closer to home we are seeing signs of the unstable political environment unsettling business confidence and delaying spending, which will also need to calm in order to lay better foundations for economic growth to revive.’ Final June data will be published on July 1 for manufacturing and July 3 for services and composite indicators. The S&P Global UK PMIs are complied from responses to questionnaires sent to survey panels of around 650 manufacturers and 650 service providers. Survey responses were collected between June 11 and 19. Copyright 2026 Alliance News Ltd. All Rights Reserved.
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