21-Aug-2025 14:35

S&P Global Flash UK PMI data indicated that private sector output growth accelerated to its fastest for 12 months in August, led by a solid upturn in the service economy. Moreover, new business volumes expanded at the strongest pace since October 2024. Employment was again a weak spot as total workforce numbers decreased for the eleventh month running and at a marked pace.

Input cost inflation meanwhile edged up to its highest since May. Survey respondents continued to note that suppliers had sought to pass on increased National Insurance costs.

Higher payroll costs also resulted in another robust rise in prices charged by private sector firms in August, with service providers recording particularly strong inflationary pressures.

The headline seasonally adjusted S&P Global Flash UK PMI Composite Output Index posted 53.0 in August, up from 51.5 in July and above the neutral 50.0 threshold for the fourth successive month.

Output growth was the strongest since August 2024, with a faster rise in service sector activity more than offsetting another marginal decline in manufacturing production. Service providers typically cited improved demand conditions, while goods producers linked lower output to a lack of new work and intense competitive pressures.

Total new work across the private sector economy returned to growth in August, following a moderate decline in July.

Employment decreased at a solid pace in August, with cutbacks to payroll numbers seen in both the manufacturing and service sectors. August data also indicated a sharp and accelerated rise in average cost burdens across the private sector economy.

Prices charged by UK private sector companies increased at a robust pace in August. Finally, business activity expectations for the year ahead edged up to the highest since October 2024.

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