The May DMP survey was conducted between 9 and 23 May and received 2,129 responses.
Firms reported that their realised own-price growth remained unchanged at an average annual rate of 3.5% in the three months to May. Note that the DMP covers own prices from firms across the whole economy, not just consumer-facing firms.
Year-ahead own-price inflation was expected to be 3.7% in the three months to May, 0.2 percentage points lower than firms reported in the three months to April. Businesses therefore expect output price inflation to increase by 0.2 percentage points over the next year, based on three-month averages.
Expectations for year-ahead CPI inflation remained unchanged at 3.2% in the three months to May. The corresponding measure for three-years ahead CPI inflation expectations was 2.8% in the three months to May, which has been unchanged since the three months to January.
Firms reported that annual wage growth was 4.7% in the three months to May, 0.1 percentage points lower than in the three months to April. Expected year-ahead wage growth fell by 0.1 percentage points to 3.7% on a three-month moving-average basis in May. The single month figure rose by 0.1 percentage points to 3.6%, after falling to the lowest level since the question was introduced, in May 2022, in April. Firms expect their wage growth to decline by 1 percentage point over the next 12 months, based on three-month averages.
This month firms were asked about the potential impacts of recent changes to US trade policy on their sales, prices and investment over the next year. Across all questions on sales, prices and investment over 70% of firms reported that changes to US trade policy would have no material impact on their firms. 22% of firms reported sales will be lower in the year ahead as a result of trade policy changes, 20% of firms reported that their capital expenditures would be lower and 15% reported that their average prices would be lower – with 7% reporting their prices would be higher as a result of the changes.
Firms were also asked about US trade policy as a source of uncertainty for their businesses. US trade policy was reported to be one of the top three sources of uncertainty for 12% of businesses, significantly lower than the 22% who reported it to be a top-three source of uncertainty in April. Overall uncertainty also fell by 1 percentage point in the three months to May, with 56% of firms reporting that the overall level of uncertainty facing their business was high or very high.