United Kingdom: Composite PMI drops to over one-year low in September
September 23, 2022
The S&P Global/CIPS Flash Composite Purchasing Managers’ Index (PMI) fell to 48.4 in September from August's 49.6. September's result marked the worst performance since January 2021. As a result, the index fell further below the 50.0 no-change threshold, signaling a sharper deterioration in private sector operating conditions compared to the previous month.
Meanwhile, the Manufacturing PMI stood at 48.5 in September, up from August’s 47.3. Lastly, the services PMI activity index decreased to 49.2 in September (August: 50.9). Private-sector activity was dampened by rising prices and weaker demand abroad, while business sentiment for the year ahead worsened. Although employment continued to rise at a solid rate, lower new order intakes suggest this positive trend may not last in the coming months.
Chris Williamson, chief business economist at S&P Global, said:
“Falling business activity indicates that the economy is likely in recession. Companies report that the rising cost of living, linked to the energy crisis, and growing concerns about the outlook are subduing demand and hitting output levels to an extent not seen since 2009, barring the pandemic lockdowns and initial 2016 Brexit referendum shock. […] Both the new orders and future expectations gauges […] are consistent with a deepening downturn as we head into the fourth quarter.”