UK private sector output declined in April for the first time in 18 months, according to S&P Global’s flash PMI. The Composite Output Index dropped to 48.2 from 51.5 in March - the lowest reading since November 2022 - indicating a modest contraction in activity.
The downturn was driven by a sharp fall in new export orders, which declined at the fastest pace since May 2020. Respondents cited rising global uncertainty and the negative impact of new US tariffs as key factors weighing on demand and business sentiment.
Service sector activity shrank slightly, ending a 17-month growth streak, while manufacturing output fell for the sixth month in a row - the steepest drop since August 2022. Export sales in manufacturing were particularly hard-hit, with the sharpest decline (outside the pandemic) since February 2009.
Total new work fell for the fifth consecutive month. Firms noted that client caution and delayed spending decisions, driven by tariff concerns and a weak economic outlook, were stalling demand.
Weaker workloads and rising labour costs led to continued job losses in both manufacturing and services. Employment declined for the seventh straight month, as companies refrained from replacing departing staff to contain costs.
Input cost inflation accelerated to its fastest pace since February 2023, driven largely by higher National Insurance and Living Wage increases. Output price inflation also rose sharply - the strongest in nearly two years - with factory gate prices climbing steeply.
Business confidence hit its lowest point in two-and-a-half years, with firms citing recession fears, geopolitical tensions, and an uncertain domestic outlook as reasons for subdued growth expectations.