3rd Oct 2025 10:06
(Alliance News) - Growth in the UK service sector eased to a five-month low in September, as increases in output and new orders slowed, survey results from S&P Global showed on Friday.
The S&P Global UK services purchasing managers' business activity index fell to 50.8 points in September from 54.2 in August, and missed the flash reading of 51.9 released late last month.
The reading remained above the neutral 50-point mark separating growth from contraction but indicated only a modest rise in activity.
S&P Global said UK service providers suffered from sluggish demand conditions, with weak sales pipelines and pressure on margins from rising staff costs.
"Some firms noted that a tentative upturn in workloads has boosted output, while others cited the impact of investments in new product development and long-term expansion plans," S&P Global said.
Incoming new work increased only slightly in September, and at a slower rate than in the previous month.
Business activity expectations were "upbeat" in September, with 46% of companies forecasting growth during the year ahead and 14% predicting a decline.
However, optimism has eased since August and was below pre-pandemic trends.
"UK service providers experienced a disappointing end to the third quarter as weak consumer confidence, delays to business spending decisions and falling exports all weighed on demand," said Tim Moore, economics director at S&P Global Market Intelligence.
"Consequently, this summer's acceleration in output growth is now looking like a flash in the pan as elevated political and economic uncertainty has reasserted itself as a constraint on service sector performance."
The UK composite PMI also fell to 50.1 points in September from 53.5 in August. The index dropped to its lowest level for five months, and underperformed a flash reading of 51.0.
On Monday, S&P Global reported that the PMI for manufacturing fell to 46.2 points in September from 47.0 in August, sinking further below the 50-point neutral mark.
It was in line with the flash estimate from late last month.
Tim Moore said: "Many survey respondents suggested that corporate clients
had deferred spending decisions until after the Autumn Budget, while households were also hesitant about major purchases.
"Another round of job cuts followed in the wake of the subdued service sector performance during September, which marked 12 months of falling employment. This was accompanied by softer growth projections for the year ahead and slightly weaker cost pressures. These signals of softening labour market conditions and easing inflationary pressures are likely to provide support to the more dovish shift in the policy debate at the Bank of England."
The services PMI is compiled by S&P Global from responses to a questionnaire from a panel of around 650 service sector companies in the UK. The responses were collected between September 11 and 26.
By Michael Hennessey, Alliance News reporter
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