U.S. private sector firms recorded a further solid expansion of business activity in June, but there was a loss of momentum since May. This was highlighted by the seasonally adjusted IHS Markit Flash U.S. Composite PMI Output Index falling from 53.6 to 53.0 in June.
The latest reading signalled the slowest upturn in business activity for three months. Companies operating in both the service economy (‘flash’ business activity index at 53.0 in June) and manufacturing sector (‘flash’ output index at 52.9) experienced a growth slowdown since May.
The latest increase in manufacturing output was the least marked since September 2016. There were more positive developments in terms of client spending, with private sector companies recording the sharpest rise in new work since January. Greater sales volumes contributed to a rebound in business optimism to its strongest level since the start of 2017, with service providers particularly confident about their growth prospects for the next 12 months.
Staff recruitment also picked up in June, with payroll numbers expanding at the strongest pace for four months. Meanwhile, input cost inflation remained softer than the 22-month peak seen in April. However, average prices charged by private sector firms increased at the fastest pace so far this year. A number of survey respondents cited efforts to alleviate squeezed margins in June.
The composite index is based on original survey data from the IHS Markit U.S. Services PMI and the IHS Markit U.S. Manufacturing PMI. IHS Markit Flash U.S. Services PMI™
The seasonally adjusted IHS Markit Flash U.S. Services PMI™ Business Activity Index eased to 53.0 in June, from 53.6 in May, to signal the slowest upturn in service sector output since March. June data pointed to a robust and accelerated rise in new business intakes across the service economy.
Kommentar fra Markit til tallene:
“The economy ended the second quarter on a softer note. The June PMI surveys showed some pay-back after a strong May, indicating the second weakest expansion of business activity since last September. “The average expansion seen in the second quarter is down on that seen in the first three months of the year, indicating a slowing in the underlying pace of economic growth. While official GDP data are expected to turn higher in the second quarter after an especially weak start to the year (our recent GDP tracker based on various official and survey data points to 3.0% growth), the relatively subdued PMI readings suggest there are some downside risks to the extent to which GDP will rebound.
“Historical comparisons of the PMI against GDP indicates that the PMI is running at a level broadly consistent with the economy growing at a 0.4% quarterly rate (1.5% annualized) in the second quarter, or just over 2% once allowance is made for residual seasonality in the official GDP data.
“There are signs, however, that growth could pick up again: new orders showed the largest monthly rise since January, business optimism about the year ahead perked up and hiring remained encouragingly resilient. The survey is indicative of non-farm payroll growth of approximately 170,000. “Average prices charged for goods and services meanwhile showed one of the largest rises in the past two years, pointing to improved pricing power amid healthy demand.” -Ends