UK Private Sector Recovery Slows Down in August

UK private sector companies experienced a sharp decline in output growth during August.

Source: IHS Markit

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The headline UK Composite Output Index dropped for the third month running. The latest reading was still above the crucial 50.00, but indicated the slowest expansion of output since March.

Weaker recoveries were recorded in both the manufacturing and service sectors, with the manufacturing sector recording the greatest loss in momentum since July.

New order growth eased slightly in August, with stronger export sales helping to cover for the slower recovery in domestic demand.

Resilient new business volumes led to another accumulation of unfinished work, even though the latest rise in backlogs was the weakest since April.

UK Manufacturing PMI was 60.1 in August, down from 60.4 in July and the lowest since March.

Chris Williamson, chief business economist at IHS Markit stated PMI indicates the economy continues to expand at a pace slightly above the average. There are signs of UK recovery losing pace in Q3 after a buoyant second quarter.