UK exports return to growth after year-long slump, PMI shows
[LONDON] British businesses reported their first pickup in overseas orders in over a year, according to a survey suggesting private-sector activity turned a corner at the end of 2025.
S&P Global said its overall purchasing managers’ index (PMI) improved slightly to 51.4 in December, up from 51.2 the month before. While the indicator was weaker than the preliminary estimate of 52.1, it remained above the 50 threshold indicating expansion for the eighth month in a row.
New orders increased following Chancellor of the Exchequer Rachel Reeves’ budget on Nov 26 – which proved less damaging to businesses than feared, after speculation of tax rises brought demand to a standstill ahead of the fiscal event.
The pickup in activity was enjoyed by both services and manufacturing businesses.
Firms also reported a rebound in new export business, putting an end to 13 consecutive months of declines. The improvement was due to a jump in demand from US clients for UK services, which offset weak orders from major European Union markets.
Speaking about the service economy, Tim Moore, economics director at S&P Global Market Intelligence, said the increase in new work suggests “tentative signs of a recovery in client confidence after an extended period of pre-Budget gloom”.
However, price pressures remain a challenge for the private sector. A gauge of input costs rose to the highest since May 2025, and output-price inflation rebounded to a four-month high, reversing November’s drop.
Services providers said wages and fuel costs were the top inflationary forces.
Employment across the private sector continued to decline, amid higher labour costs and squeezed margins.
Still, there are signs that conditions could improve this year. Business confidence bounced back in December to match the highest reading recorded in 2025. BLOOMBERG
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