Financial News: UK Private Sector Activity Contracts In May

UK Private Sector Activity Contracts In May

05/21/2026 - 10:12:00 (RTTNews)

(RTTNews) - The UK private sector registered a renewed downturn in May amid the growing impact of the war in the Middle East, survey results from S&P Global showed Thursday.

The flash composite output index fell to 48.5 in May from 52.6 in April. The score was expected to fall to 51.6. The index remained below the neutral 50.0 mark for the first time since April 2025.

The downturn in the British private sector was driven by a renewed fall in service sector output, which contrasted with a stronger upturn in manufacturing production.

The services business activity index dropped to a 64-month low of 47.9 in May from 52.7 in April.

The sharpest fall in services activity was attributed to greater economic hesitancy and weaker investment sentiment among clients, alongside delayed consumer spending decisions in response to the Middle East war.

On the other hand, goods producers experienced a temporary uptick in demand amid customer front-loading to beat price hikes and potential supply disruptions. The manufacturing PMI held steady at 53.7.

Total new orders received by the UK private sector dropped slightly in May, and employment level and backlogs declined further, signaling a lack of pressure on business capacity.

On the price front, input price inflation eased marginally, though it remained well above its long-run average. The overall inflation was linked to rising oil prices and transportation bills, alongside higher energy and raw material costs. Selling price inflation also moderated somewhat since April.

Looking ahead, the degree of business confidence eased to the lowest since April 2025 as weaker growth expectations in the service sector more than offset a slight improvement among manufacturing companies.

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