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UK business stumbles on inflation and Ukraine war worries -PMI

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By Reuters
UK business stumbles on inflation and Ukraine war worries -PMI
UK business stumbles on inflation and Ukraine war worries -PMI   -   Copyright  Thomson Reuters 2022

LONDON – Britain’s private sector suffered a sharp slowdown this month as high inflation and the conflict in Ukraine weighed on the country’s giant services sector, a survey published on Friday showed.

The preliminary S&P Global/CIPS composite Purchasing Managers’ Index (PMI) dropped to a three-month low of 57.6 in April from 60.9 in March. Economists polled by Reuters had mostly expected a smaller fall to 59.0.

A reading above 50 indicates growth in activity, but the lower number for April added to signs of a slowdown in Britain’s economy. That poses a challenge for the Bank of England as it tries to smother the surge in inflation with higher interest rates.

A separate survey published earlier on Friday showed consumer confidence close to its lowest level since records began nearly 50 years ago.

The loss of momentum among services firms was the biggest since the Omicron coronavirus variant emerged in late 2021.

By contrast, growth in manufacturing output sped up slightly after touching a five-month low in March, and the increase in supplier delays was the weakest since October 2020.

However, much of April’s growth for factories was due to firms working off backlogs. New manufacturing orders from abroad fell by the most since June 2020 as European clients cut back.

Brexit, recent bottlenecks in British ports and sanctions on Russia also hit export orders, some firms said.

Job creation across the private sector was the slowest in 12 months. Some employers struggled to find the right candidates but others sought to cut costs.

Input costs rose by the second-biggest amount on record and the jump for manufacturers was the joint biggest in over 30 years of data collection.

Prices charged by businesses across the private sector eased in April but factory gate prices rose by the most since this index began in November 1999.

Business optimism dropped for the third month running in April and was the lowest since October 2020.