April data from the S&P Global Flash UK PMI survey signalled a decline in private sector output for the first time in one-and-a-half years. Weaker demand from international markets weighed on business activity in both the manufacturing and service sectors.
The latest figures indicated that total new work from abroad decreased sharply and at the fastest pace for nearly five years. Survey respondents widely commented on the negative impact of US tariffs and a subsequent slump in confidence among clients.
Business activity expectations among UK private sector firms also weakened in April. The degree of optimism towards the year ahead outlook slumped to its lowest since October 2022. Many survey respondents noted concerns about worsening global economic prospects in the wake of US tariffs, as well as subdued confidence regarding the outlook for domestic business conditions.
At 48.2 in April, down from 51.5 in March, the headline seasonally adjusted S&P Global Flash UK PMI Composite Output Index posted below the neutral 50.0 value for the first time since October 2023. Although signalling only a modest rate of decline, the latest reading was the lowest since November 2022.
Service providers recorded a marginal decrease in business activity during April, which ended a 17-month period of expansion. Manufacturers recorded a fall in production volumes for the sixth successive month.
Total new work received by UK private sector firms decreased for the fifth month running and at a solid pace in April. Decreased workloads and rising payroll costs contributed to employment cutbacks across the UK private sector in April.
Average cost burdens increased at a sharp and accelerated pace in April. Finally, business activity expectations weakened considerably in both the manufacturing and service sectors, with overall confidence levels the lowest for two-a-and-a-half years.