Chris Williamson, Chief Economist at Markit, comments on the May survey:
Recent weakness in manufacturing and construction has spread to services. Overall growth in May across all three sectors was the lowest since December and the second-weakest for two years.
Survey points to GDP growing at a quarterly rate of just 0.4% in May, raising doubts about the ability of the economy to rebound convincingly from the weakness seen at the start of the year.
However, there are signs that the disappointing rate of expansion is only temporary, linked to uncertainty surrounding the general election, and the surveys point to rising inflationary pressures as well as a further tightening of the labour market
David Noble, Group Chief Executive Officer at the Chartered Institute of Procurement & Supply, points out “the index still retained its position in positive territory and was higher than its long-term average…The effect of pre-election uncertainty was largely dissipated…the threat of deflation receded somewhat.”
Citi’s head of European Economics notes the soft reading contrasts with strength in CBI’s survey of service sector growth in May.