- Prior 55.9
- Manufacturing PMI 46.9 vs 48.0 expected
- Prior 47.8
- Composite PMI 53.9 vs 54.6 expected
- Prior 54.9
Similar to the Eurozone economy, there is a contrast in the UK economy as well with manufacturing conditions keeping on the softer side while services activity is staying more solid. Overall, it points to a bit of slowing in growth but at least this continues to put aside worries about a recession. S&P Global notes that:
“The UK economy enjoyed another month of strong growth
in May, with the expansion continuing to be driven by
surging post-pandemic demand in the service sector,
notably from consumers and for financial services, with
hospitality activities buoyed further by the Coronation. The
surveys are consistent with GDP rising 0.4% in the second
quarter after a 0.1% rise in the first quarter.
“However, this growth spurt is driving renewed inflationary
pressures, as service providers struggle to meet demand
and hence not only offer higher wages to attract staff but
also find themselves able to charge more for their services.
“It’s a different story in manufacturing, where spending is
being diverted away from goods to services, and many
companies are also winding down their inventories,
exacerbating the downturn in demand and driving both
output and prices lower.
“The UK is therefore seeing a tale of two economies, with
the divergence between manufacturing and services
posing difficulties for policymakers. However, it’s the far
larger service sector that will typically dictate policy,
meaning these survey results are nothing but hawkish in
suggesting the Bank of England has more work to do to
quash stubbornly high inflationary pressures in the
services economy.”