UK’s private sector activity continues to grow in September but at slower pace - IHS Markit

The report from IHS Markit showed on Wednesday that the UK’s private sector output continued to expand in September, albeit at a slower pace than in the previous month, as both manufacturing production and service sector activity recorded weaker rises.

According to the report, the seasonally adjusted IHS Markit/CIPS Flash UK Manufacturing Purchasing Managers’ Index (PMI) fell to 54.3 in September from 55.2 in previous month, remaining above the neutral 50-threshold for the fourth consecutive month. Economists had forecast the indicator to increase to 54.1 in September. The decline in the index mainly reflected the slowdown in growth of the output and new business sub-indexes from August's recent peaks, which was partly linked to an easing of the catch-up effect, while plant capacity was brought back on line through the summer.

Meanwhile, the seasonally adjusted IHS Markit/CIPS Flash UK Services PMI Business Activity Index came in at 55.1 in September, down from 58.8 in August, signaling the weakest performance for the sector in three months and marking the first setback for the recovery since the turnaround began in May. Economists had forecast the indicator to rise to 56.0 in September.

The headline seasonally adjusted IHS Markit/CIPS Flash UK Composite Output Index declined to 55.7 in September from August's six-year high of 59.1. This was the lowest reading since June as well, but signaled a sustained increase in private sector output. Economists had forecast the indicator to come in at 56.3 in September.