Services PMI

The S&P Global UK Services PMI is a monthly survey compiled by S&P Global. It belongs to the Purchasing Managers Index programme, which covers more than 40 countries. Each month it polls about 650 service firms, chosen by sector and workforce size. The panel mirrors each sector share of output, so results reflect the service economy.

Covered activities span consumer services excluding retail, transport, information and communication. They also span finance, insurance, real estate and business services. The report tracks change in activity, demand, employment and prices.

It measures only the direction and breadth of monthly change, never the level of output. Retail stays out of scope, and education and health cover the private sector only. Manufacturing and the whole private sector have separate gauges, so scope never overlaps.

Replies are collected in the second half of the reference month. Each firm reports whether conditions rose, held steady or fell against the prior month. A flash estimate for composite, services and manufacturing appears before month end. It rests on about 80-90% of replies, so it can shift when the full panel arrives.

The average flash to final gap for services is 0.2 points, with an absolute gap of 0.7. Manufacturing final comes first after month end, then services with composite follow. Publication lands in the morning London time, while holidays can shift weekdays.

Each release also shows the composite output gauge, world aggregates, service sub sectors and price lists. Panel replies are never revised after publication, though seasonal factors can change.

Services move with demand pipelines, spare capacity, hiring, costs, selling prices and expectations. The survey asks 8 questions each month, and business activity is the headline.

• Business activity: headline gauge of change in service output volume against the prior month.
• New business: total new orders showing demand strength and sales pipeline health.
• New export business: orders from abroad, split by source market demand.
• Outstanding business and employment: backlog pressure plus staffing moves such as freezes, redundancies and replacement of leavers.
• Input prices and prices charged: cost burdens such as wages, materials and shipping, plus pass through to selling prices and margins.
• Future activity: expectations for the year ahead, based on the share of optimists against pessimists.

A reading just above 50 means only marginal expansion in breadth, never strong growth or a high output level. It also cannot be compared with manufacturing PMI, and composite PMI is a separate gauge.

• Tally replies: for each question, count shares answering higher, unchanged and lower against one month before.
• Diffusion index: add the higher share plus half the unchanged share, so the index equals H plus 0.5 times U.
• Worked example: with 30% higher, 50% unchanged and 20% lower, the index is 30 plus half of 50, or 55.0.
• Read the scale: the index runs from 0 to 100, where above 50 means increase, below 50 decrease and 50 means no change.
• Seasonal adjustment: adjust the index for seasonal calendar effects before publication.
• Headline rule: the headline is this adjusted Business Activity Index alone, with no sub index weighting.
• Contrast with manufacturing: manufacturing blends 5 indices, namely New Orders 30%, Output 25%, Employment 20%, Suppliers Delivery Times 15% and Stocks 10%. The Suppliers Delivery Times index is inverted.
• Composite note: composite blends manufacturing output and services activity by GDP shares.

A chart key refines moves into states such as faster, steady or slower growth and decline.