UK services sector contracts in June amid cost pressures and weak demand
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IN SHORT
The UK services sector contracted in June at its fastest pace in three-and-a-half years, with a Purchasing Managers' Index (PMI) of 48.8, driven by cost pressures and weak demand. Meanwhile, African economies are showing a strong rebound, with business activity increasing due to falling energy and import costs. Kenya and South Africa's PMIs have returned to expansion territory, indicating a wider regional economic recovery.
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Key Numbers
48.8UK services sector PMI in June
three-and-a-half yearsfastest UK services sector decline rate
Who's Involved
UK services sector
experienced fastest decline in three-and-a-half years in June
African economies
showing strong rebound in business activity
Kenya
PMI moved back into expansion territory
South Africa
PMI moved back into expansion territory
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Key facts
The UK services sector contracted in June.
The UK services sector's decline was the fastest in three-and-a-half years.
The UK services sector's Purchasing Managers' Index (PMI) was 48.8 in June.
UK businesses cited strong cost pressures and weak demand as challenges.
Uncertainties from the Middle East conflict also impacted UK businesses.
African economies show a strong rebound in business activity.
Falling global energy and import costs are driving the African rebound.
Kenya's PMI has moved back into expansion territory.
South Africa's PMI has moved back into expansion territory.
The UK services sector experienced its fastest rate of decline in three-and-a-half years in June, registering a Purchasing Managers' Index (PMI) of 48.8. This contraction was attributed to significant cost pressures, a lack of robust demand, and ongoing uncertainties stemming from the Middle East conflict. Businesses in the UK services sector are facing considerable challenges that are impacting their operational capacity and growth prospects.
In contrast, African economies are demonstrating a strong rebound in business activity. This recovery is largely fueled by a notable decrease in global energy and import costs, which has eased financial burdens on businesses across the continent. Purchasing Managers' Index data specifically highlights that Kenya and South Africa have seen their PMIs move back into expansion territory, signaling a broader economic recovery trend throughout the region. This suggests a positive shift in economic momentum for these African nations.
↳ Why This Matters
The UK services sector experienced its fastest rate of decline in three-and-a-half years in June, registering a Purchasing Managers' Index (PMI) of 48.8. This contraction was attributed to significant cost pressures, a lack of robust demand, and ongoing uncertainties stemming from the Middle East conflict. Businesses in the UK services sector are facing considerable challenges that are impacting their operational capacity and growth prospects.
Frequently asked questions
The UK services sector PMI was 48.8 in June, indicating a contraction.
Key factors included strong cost pressures, lackluster demand, and business uncertainties arising from the Middle East conflict.
Economists doubt growth will pick up much through the rest of the year, with continued speculation about fiscal policy direction.
A key challenge is finding £4.7 billion to fund the defense investment plan.
What Happens Next
01Andy Burnham to outline new fiscal direction for the country.
02Analysis of Burnham's strategy for funding defense and other commitments.
03Monitoring of future PMI data for signs of economic recovery or continued contraction.
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