16th Dec 2025 09:46
(Alliance News) - The UK's private sector performed better than anticipated in December, however the overall pace of output and demand growth "remains lacklustre", preliminary data published by S&P Global showed Tuesday.
The flash UK purchasing managers' composite output index rose to 52.1 points in December from 51.2 in November, outperforming FXStreet-cited expectations of a milder increase to 51.4 in December.
Growing beyond the neutral 50-point mark separating growth from contraction, it indicates the pace of growth in the UK's private sector accelerated in December.
The flash services business activity index climbed to 52.1 in December from 51.3 in November, beating the consensus of 51.5 for December.
Despite the figures, cutbacks to staffing numbers persisted with employment falling for the 15th consecutive month, S&P highlighted.
Meanwhile, a renewed increase in new order intakes helped to boost private sector output in December. Backlogs of work at private sector firms rose for the first time since February 2023, albeit marginally.
"Higher levels of unfinished business were attributed to a combination of worsening supplier performance and higher-than-expected demand," S&P Global said.
The flash manufacturing index rose to a 15-month high of 51.2 in December from 50.2 in November, better than the consensus of 50.2 in December.
S&P Global said: "Manufacturers suggested that rising competitive pressures across domestic and export markets were the main factors weighing on business optimism, particularly due to greater operating costs."
The flash manufacturing output index also reached a 15-month high, of 51.8 in December from 50.3 in November.
While noting that the UK's private sector did not fall into a repeat of 2024's "post-budget gloom," Chris Williamson, chief business economist at S&P Global Market Intelligence, cautioned: "However, the overall pace of output and demand growth remains lacklustre, and the expansion is still very dependent on technology and financial services activity, with many other parts of the economy struggling to grow or in decline.
"Job losses are also again worryingly widespread, and it remains to be seen whether the uptick in orders during December will persuade more companies to start hiring again, especially as rising staff costs continue to be reported as one of the key concerns of businesses. These higher cost pressures were in turn cited as the key cause of a renewed upturn in selling price inflation across both goods and services."
The flash UK composite PMI features a panel of 650 companies in the service sectors and Manufacturing. The responses were collected between December 4 and 12.
Final December figures will be published on January 2 for manufacturing and January 6 for services and the composite index.
By Tom Budszus, Alliance News slot editor
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