• Prior 52.7
• Final Composite PMI 49.7 vs 48.5 prelim
• Prior 52.6

Key findings:

• Business activity decreases for the first time since April 2025
• Marginal falls in service sector output and new orders
• Sharp increase in input prices
• Business activity expectations ease to a 13-month low

Comment:

Tim Moore, Economics Director at S&P Global Market Intelligence, said:

“UK service sector companies signalled a reversal of fortunes in May as business activity fell into contraction after showing some resilience earlier this spring. Subdued business and consumer demand, across both domestic and overseas markets, was cited as holding back performance.

“Many service sector companies noted that the Middle East conflict had an adverse impact on sales pipelines and general business prospects. Those in the hospitality and transportation sectors typically commented on squeezed discretionary spending and pressure from sharply rising input costs, while professional services firms reported a setback from rising risk aversion among clients. Business investment spending on technology services remained a bright spot for parts of the service economy, however.

“A rapid acceleration in input cost pressures has been the major challenge for service providers so far this year, driven by higher fuel prices and transportation bills. The overall rate of input price inflation did ease slightly in comparison to April, but it was still higher than at any other time since the energy crisis in 2022.

“Worries about a prolonged spike in inflationary pressures, combined with elevated geopolitical tensions and subdued demand, continued to weigh on business activity expectations in May. The degree of optimism eased for the third time in four months, to its lowest since the US tariffs-related slump in April 2025.”

This article was written by Giuseppe Dellamotta at investinglive.com.