The S&P Flash PMI for the United Kingdom suggests mixed conditions across sectors in June. The headline indicator for the manufacturing sector rose slightly but that of the services sector fell sharply, with the latter falling well short of the consensus forecast.

The headline index for the manufacturing sector suggests slightly stronger contraction in June, increasing slightly to a near two-year high of 51.4 from 51.2 in May. The business activity index for the services sector, however, shows substantially weaker expansion, falling to a seven-month low of 51.2 from 52.9 in May. Reflecting these moves, the flash composite index fell from 53.0 in May to 51.7 in June, also a seven-month low and indicating moderate expansion in the aggregate economy.

Survey respondents reported a bigger increase in manufacturing output but weaker growth in service sector activity in June. The surveys show a small increase in new orders in the services sector but the biggest increase in factory new orders in just over two years, while respondents reported modest payrolls growth in the services sector but another decline in payrolls in the manufacturing sector. The surveys' measures of business confidence showed weaker sentiment across both sectors, with respondents citing the impact of upcoming national elections. Both input costs and output prices were reported to have risen at a sharper pace in both sectors.

Today's data were weaker the consensus forecasts for 53.3 in the composite index and 53.2 in the services index, but slightly stronger than 51.3 in the manufacturing index. The United Kingdom RPI fell from minus 8 to minus 25, while the RPI-P fell from plus 2 to minus 21, indicating that UK data are now coming in below consensus expectations.

Manufacturing climbed more than 2 points in May and into the plus-50 expansion zone at 51.2 with June seen steady at 51.3. Services, by contrast, slowed more than 3 points in May to 52.9 with June's consensus at 53.2. The composite is expected to rise 3 tenths to 53.0.

The flash Composite Purchasing Managers’ Index (PMI) provides an early estimate of current private sector business activity by combining information obtained from surveys of the manufacturing and service sectors of the economy, around 650 companies in each case. The flash data are released around ten days ahead of the final report and are typically based upon around 75-85 percent of the full survey sample. Results covering a range of variables including manufacturing output, employment, new orders, backlogs and prices are synthesised into a single index which can range between zero and 100. A reading above (below) 50 signals rising (falling) activity versus the previous month and the closer to 100 (zero) the faster is activity growing (contracting). The report also contains flash estimates of the manufacturing and services PMIs. The survey is produced by S&P Global.

Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data such as the purchasing managers' surveys, investors will know what the economic backdrop is for the various markets. The flash PMIs are particularly closely watched as they provide a wide ranging look at economic developments and some of the most up to date information available. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures.