Financial News: UK Private Sector Logs Steady Growth

UK Private Sector Logs Steady Growth

12/16/2024 - 08:15:00 (RTTNews)

(RTTNews) - The UK private sector logged a steady growth in December with rising activity across the services economy offsetting an accelerated downturn in manufacturing output, flash survey results from S&P Global showed on Monday.

The flash composite output index posted 50.5 in December, unchanged from November's 13-month low.

Divergent trends were recorded in the manufacturing and service sectors in December. The factory Purchasing Managers' Index fell to an 11-month low of 47.3 compared to 48.0 in November. The reading was seen at 48.4.

By contrast, the services PMI rose to 51.4, up from 50.4 in the prior month. The reading was above forecast of 50.9.

Data highlighted headwinds from fragile consumer confidence, tighter corporate budgets and cutbacks to non-essential spending. There was a steep and accelerated decrease in new orders in the manufacturing. Unfinished work dropped for the twentieth consecutive month and at the sharpest pace since November 2023. The fall in total staffing numbers was the fastest for almost four years.

Rising salary payments and elevated domestic inflationary pressures pushed up cost burdens. The rate of input price inflation was the strongest since April. At the same time, average prices charged by firms increased at the steepest pace for nine months. Business activity expectations for the year ahead moderated for the fifth successive month in December. Optimism hit the lowest since December 2022 due to an ongoing slide in service sector confidence.

"While the December PMI is indicative of the economy more or less stalled in the fourth quarter, the loss of confidence and increased culling of jobs hints at worse to come as we head into the new year," S&P Global Market Intelligence Chief Business Economist Chris Williamson said.

"Policymakers at the Bank of England may be cautious about cutting interest rates, however, given the resurgence of inflation being signaled, adding further to downturn risks in 2025," Williamson added.

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