United Kingdom: Composite PMI falls for fourth month running in September
The IHS Markit Composite Purchasing Managers’ Index (PMI) fell to 54.1 in September from August’s final reading of 54.8, marking the weakest reading since February. As such, the index remained entrenched above the 50-threshold, signaling a softer improvement in business conditions from the previous month.
The headline print reflected a deterioration in both the Services PMI and the Manufacturing PMI. Output growth eased in both sectors, with the slowdown more pronounced in the manufacturing sector where production was inhibited by severe supply-chain disruptions and softer demand.
Regarding September’s reading, Chris Williamson, chief business economist at IHS Markit, commented:
“The September PMI data will add to worries that the UK economy is heading towards a bout of ‘stagflation’, with growth continuing to trend lower while prices surge ever higher. […] Shortages are driving up prices at unprecedented rates as firms pass on higher supplier charges and increases in staff pay. Brexit was often cited as having exacerbated global pandemic-related supply and labour market constraints, as well as often being blamed on lost export sales.”