UK private sector back on rise in July on "marginal" climb in new work
The UK private sector returned to growth at the start of the third quarter, a purchasing managers' index reading showed on Friday, amid a slight rise in new work.
The S&P Global flash composite purchasing managers' index rose to 52.1 points in July from 49.3 in June, a three-month high and back above the 50-point mark that separates growth from contraction. It beat the FXStreet-cited market consensus of 49.7 points.
The composite PMI is made up of the services and manufacturing PMIs.
The services PMI also returned to growth territory and similarly hit a three-month high, rising to 51.8 points in July from June's final tally of 48.8.
The manufacturing PMI advanced to 52.8 in July from 52.5 in June, a two-month high. The services PMI beat a 49.4-point forecast, while the manufacturing PMI beat consensus of 52.0.
"July data highlighted an increase in UK private sector output for the first time in three months, supported by a marginal upturn in new work. Moreover, the latest survey indicated that business activity expectations for the year ahead were the most upbeat since February," S&P Global said.
"Input price inflation meanwhile eased further from April's recent peak. The latest rise in average cost burdens was the least marked for five months, helped by lower fuel bills and softer raw material price inflation."
In services, hospitality was boosted by the football World Cup, though the sector saw some "reports of elevated business uncertainty among clients linked to the Middle East conflict".
"Some firms also suggested that unusually hot weather had negatively affected business activity in July," S&P Global said.
"Manufacturers indicated the least marked downturn in supplier performance since February, despite many firms noting longer international shipping times. At the same time, input buying decreased slightly in July amid reduced safety stock building, which led to the sharpest decline in preproduction inventories since August 2025."
Input price inflation in the private sector cooled for the third month running.
"Where higher cost burdens were reported, this often reflected rising salary payments and increased prices paid for technology hardware. There were also reports of rising logistics costs, in part due to the Middle East conflict, despite a reduction in fuel prices. Some manufacturers noted instances of lower raw material prices and oil-related surcharges," S&P Global said.
The survey draws upon a panel of around 650 manufacturers and 650 service providers in the UK. Responses were collected in the second half of the month, with the flash data drawing upon 80% to 90% of the responses.
Final July data for manufacturing is released on August 3, with the composite and services reading following two days later.
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