Economic Buzz: UK private sector growth slows to near-stagnation as PMI drops to 51.0

UK private sector growth slowed sharply in March, with business activity expanding at its weakest pace since September 2025. The S&P Global Flash UK Composite PMI fell to 51.0 from 53.7 in February, signalling only marginal growth.

The slowdown was driven by weaker customer demand, as businesses reported reduced confidence due to the ongoing Middle East conflict, rising inflation and concerns over borrowing costs. Total new orders declined for the first time in four months, with export demand also under pressure, particularly in the services sector.

At the same time, cost pressures intensified significantly. Input prices rose at the fastest rate since February 2023, with manufacturers reporting the steepest increase in costs since October 2022. Higher fuel, transport and raw material prices were widely cited. Companies responded by raising selling prices at the quickest pace since April 2025.

Supply chain disruptions worsened, with longer delivery times linked to shipping delays and production issues in key regions. Inventory levels declined as firms faced both weaker demand and logistical challenges.

Employment fell again as companies reacted to squeezed margins and slower growth. Business confidence also dropped to a nine-month low, reflecting concerns about geopolitical risks, rising living costs and a subdued domestic outlook.

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