UK Private Sector Activity Returns To Growth In July

(RTTNews) - The UK private sector expanded for the first time in three months in July amid a slight upturn in new business, flash results of the purchasing managers' survey by S&P Global showed Friday.

The flash composite output index rose to a 3-month high of 52.1 in July from 49.3 in the previous month. A score above 50 indicates expansion, while any reading below 50 suggests contraction.

The survey revealed that improved performances were seen in both the manufacturing and service sectors in July. The services PMI climbed to 51.8 from 48.8 in June, and the manufacturing PMI improved to 52.8 from 52.5.

The renewed growth seen in the service sector was driven by stronger demand for consumer services, including in parts of the hospitality sector due to the FIFA World Cup. Nonetheless, some firms also faced challenges linked to the Middle East conflict along with unusual hot weather conditions.

Total new work received by the British private sector rose marginally, supported by sharp growth in manufacturing orders. Export orders also grew amid stronger demand from US and European customers.

On the price front, input price inflation eased for the third successive month in July, helped by softer cost pressures in both the manufacturing and service sectors. Rising cost pressures and a lack of pressure on business capacity led to a further reduction in private sector employment in July.

Looking ahead, business activity expectations over the next year ahead improved to a 5-month high in July, buoyed by improved market conditions at home and abroad, alongside hopes of easing geopolitical risks over the longer term.

"But with Middle East worries flaring up again in recent days, a sustained cooling in the price data and upturn in business confidence are by no means assured," Chris Williamson, chief business economist at S&P Global Market Intelligence, said.