At 50.3, the final PMI composite index for May was 0.9 points above the flash estimate and consensus and up 1.8 points from April's final. The composite index for May posted above the 50-growth threshold, signalling a slight expansion of business activity.

The service sector index increased to a final 50.9, up 0.7 points from the flash estimate and consensus and up 1.9 points from April's final. This signals expansion of service activity, however, it is still below the long-run average of 54.3. New business fell for the fourth time in five months. Employment continued its downward trend with staffing numbers falling for the eighth consecutive month, due to rising payroll costs and rising contributions to the National Insurance Contributions. Business confidence rebounded from April's two and a half year low to the highest it has been since October 2024. Input price inflation also eased from April's 21-month high, leading to a slower increase in prices charged.

May's data put the UK RPI at 47 and the RPI-P at 38, meaning that overall economic activity is modestly outperforming market forecasts.

No change from the flash at 49.4 is the call for the May composite final, up from 48.5 in March. No change is expected from the flash at 50.2 for services, up from 49.0 in April.

The Services Purchasing Managers' Index (PMI) provides an estimate of service sector business activity for the preceding month by using information obtained from a representative sector survey incorporating transport and communication, financial intermediation, business services, personal services, computing and IT and hotels and restaurants. Results 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 data are compiled by the Chartered Institute of Purchasing and Supply (CIPS) and 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 ISM non-manufacturing index in the U.S. and the S&P Global PMIs elsewhere, investors will know what the economic backdrop is for the various markets. 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.

The S&P Global PMI services data give a detailed look at the services sector, how busy it is and where things are headed. The indexes are widely used by businesses, governments and economic analysts in financial institutions to help better understand business conditions and guide corporate and investment strategy. In particular, central banks in many countries use the data to help make interest rate decisions. PMI surveys are the first indicators of economic conditions published each month and are therefore available well ahead of comparable data produced by government bodies.