| Consensus | Consensus Range | Actual | Previous | |
| Composite Index | 48.5 | 49.4 | ||
| Services Index | 48.4 | 48.4 to 48.6 | 48.0 | 49.6 |
Highlights
Private sector activity weakens in August as services drag composite lower as shown by the Services PMI Business Activity Index falling to 48.0 in August from 49.6 in July, signaling a faster contraction in services activity. Weaker demand, partly linked to extreme summer heat, weighed on output.
New business fell for the eighth time in nine months, though the decline was moderate overall. Export sales fell at the fastest pace since May, a sharper drag than domestic demand. Backlogs fell at the sharpest pace in four months, extending a downward trend now in its twelfth month and pointing to rising spare capacity. Employment was cut again, mainly through non-replacement of leavers, though job losses were modest and slightly softer than in July.
Looking ahead, services firms turned more optimistic about the 12-month outlook, though confidence remained historically weak and below its long-run average, with political uncertainty, falling client demand, and challenging global conditions cited as headwinds.
On prices, input costs rose sharply, driven by fuel, with the rate of inflation ticking up fractionally for the first time since May. Output prices were raised more aggressively, at the strongest pace in three months.
The Composite PMI Output Index fell to 48.5 from 49.4, indicating a modest but quicker decline in overall private sector activity, driven entirely by services, as manufacturing output rose marginally. Total new orders declined broadly across both sectors, backlogs fell more sharply despite continued payroll cuts, output price inflation held steady even as input cost pressures eased to a six-month low, and business confidence weakened for the first time since May.
Market Consensus Before Announcement
Forecasters see the final services PMI at 48.4 versus 48.8 in the flash for August and 49.6 in July.