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The S&P Global/CIPS UK Services PMI was confirmed at 53.7 in June of 2023, the lowest in three months. The reading pointed to a slower, albeit sustained expansion in services sector activity, amid resilient business and consumer spending, despite pressure on budgets from elevated inflationary pressures.
There were slower increases in business activity and new work while export sales were a reasonably bright spot, despite ongoing reports of Brexit-related trade constraints.
Meanwhile, the rate of job creation accelerated to its fastest since September 2022, which helped to boost business capacity and in turn resulted in an overall reduction in backlogs of work for the first time since January.
On the price front, input cost inflation eased to its lowest since May 2021 and price charges also slowed. Finally, service providers remain upbeat about their growth prospects.
The S&P Global/CIPS UK Composite PMI was confirmed at 52.8 in June 2023, down from 54 in the previous month. The latest figure signaled the slowest rate of private sector output expansion since March, as a solid increase in service sector activity contrasted with another fall in manufacturing production.
Overall, new orders in the private sector experienced only marginal growth in June, while employment rose, and backlogs of work fell the most so far this year. On the price front, input cost inflation was the lowest since February 2021, while prices charged increased at the slowest pace in 26 months.
We also saw the eurozone PPI data released today. The headline number came in at-1.5% vs -1.3% y/y expected, while the prior reading was +1.0%; revised to +0.9%.
Looking at the breakdown, the heavy drag once again comes from the energy sector (-5.0%) as prices for intermediate goods (-1.0%) and non-durable consumer goods (-0.1%) also declined. The prices for capital goods were stable on the month while durable consumer goods prices increased by 0.3%. If you strip out energy, producer prices only fell by 0.4% in June.
