• Prior 53.4
  • Manufacturing PMI 53.4 vs 53.7 expected
  • Prior 54.6
  • Composite PMI 53.1 vs 52.6 expected
  • Prior 53.1

The services and composite readings are unchanged from May but the manufacturing reading did fall further to a 23-month low. Overall, growth conditions are stalling but at least there is some resilience to it. That said, business expectations fell to its weakest since May 2020 with exceptionally strong price pressures still persisting.

Of note, businesses said that they saw the need to pass on higher energy, fuel and wage costs to customers. S&P Global notes that:

“The economy is starting to look like it is running on empty. Current business growth is being supported by orders placed in prior months as companies report a near-stalling of demand. Manufacturers in particular are struggling with falling orders, especially for exports, and the service sector is already seeing signs of the recent growth spurt from pent-up pandemic demand move into reverse amid the rising cost of living.

“Business confidence has now slumped to a level which has in the past typically signalled an imminent recession. The weakness of the broad flow of economic data so far in the second quarter points to a drop in GDP which the forward-looking PMI numbers suggest will gather momentum in the third quarter.

“While there are some signs that the inflation could soon peak, the survey data suggest the rate of inflation will meanwhile remain historically high for some time to come, indicating that the UK looks set for a troubling combination of recession and elevated  inflation  as we move into the second half of the year.”