Private sector businesses in the UK have seen continued growth in business activity during September, albeit at a slower rate.
Both the manufacturing and services sectors recorded a slower rise in output, according to S&P Global’s latest Flash Purchasing Managers’ Index (PMI). This meant that the overall speed of recovery moderated for the first time since June.
The headline seasonally adjusted Composite Output Index stood at 52.9 for the month, down from 53.8 in August but still “comfortably” above the 50.0 no-change value, S&P Global said.
Higher levels of business activity have been recorded in each month since November 2023 and the latest rate of expansion was broadly in line with the average over this period.
There were still signs of elevated cost pressures, but selling price inflation continued to cool with the slowest rise in average prices charged by private sector firms since February 2021. Many survey respondents suggested that intense competitive pressures had acted as a brake on pricing power.
The report also showed that business optimism has risen, albeit with concerns about the impact of the upcoming Autumn Statement.
“Investment plans in particular are reported to have been put on ice pending clarity on the new government’s policies, especially towards taxation,” said Chris Williamson, chief business economist at S&P Global Market Intelligence. “Hiring likewise has been stifled by business uncertainty about the near-term economic outlook ahead of the Budget.”
