In May 2025, the UK composite PMI rose slightly to 49.4 from 48.5 in April, but remained below the 50.0 threshold, signalling a mild contraction in overall private sector activity for the second consecutive month. The modest recovery fell short of consensus expectations (49.5), reflecting a fragile business environment.

Manufacturing remained the economy's weak spot, with the index slipping to 45.1down from 45.4 in April and below forecasts of 46.0. This marks another month of declining factory output, pointing to ongoing struggles with weak demand, cost pressures, and disruptions in supply chains.

In contrast, the services sector returned to growth, exceeding expectations with a reading of 50.2. This suggests that domestic consumer demand and business services are stabilising, offering some support to the wider economy.

Overall, while the services sector provides a glimmer of resilience, persistent contraction in manufacturing and a composite PMI below 50 highlight the UK's ongoing economic vulnerabilities. The data imply a tentative turning pointbut not yet a robust or broad-based recovery, taking the RPI to 31 and the RPI-P to 20. This means economic activities remain well ahead of expectations in the UK economy.

The composite flash for May is expected at 49.5 versus 48.5 in the April final. The consensus looks for manufacturing at 46.0 in the May flash versus 45.4 in the April final. Services is expected at 50.0 versus 49.0 in the April final.

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.