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United Kingdom PMI May 2022

United Kingdom: Composite PMI records worst reading since February 2021 in May

The S&P Global/CIPS Flash Composite Purchasing Managers’ Index (PMI) came in at 51.8 in May, down from April’s 58.2. May’s result marked the worst reading since February 2021. Consequently, the index remained above the 50.0 no-change mark, pointing to a continued, albeit moderating, improvement in business conditions from the previous month.

The Manufacturing PMI came in at 54.6 in May, down from April’s 55.8, as the war in Ukraine, rising inflation and supply chain difficulties weighed on output. Moreover, export orders fell at the sharpest rate in nearly two years, partly due to trade frictions resulting from Brexit. Meanwhile, the services PMI activity index fell to 51.8 in May (April: 58.9), as greater economic uncertainty weighed on demand. However, the hospitality sector continued to benefit from the lifting of pandemic restrictions. In the private sector as a whole, cost pressures rose at a record rate, while business sentiment slumped to the lowest level in two years.

Chris Williamson, chief business economist at S&P Global, commented:

“The UK PMI survey data signal a severe slowing in the rate of economic growth in May, with forward-looking indicators hinting that worse is to come. Meanwhile, the inflation picture has worsened as the rate of increase of companies’ costs hit yet another all-time high. The survey data therefore point to the economy almost grinding to a halt as inflationary pressure rises to unprecedented levels. The tailwind from the reopening of the economy has faded, having been overcome by headwinds of soaring prices, supply delays, labour shortages and increasingly gloomy prospects.”

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