U.S. Business Activity Hits 18-Month High, IHS Markit Data Show
(Bloomberg) -- U.S. business activity expanded in August at the strongest pace since early last year as faster growth at manufacturers spilled over to service providers, indicating the recovery is broadening.
The IHS Markit flash composite index of purchasing managers at manufacturers and service providers increased 4.4 points to an 18-month high of 54.7, the group reported Friday. Readings above 50 indicate growth and the measure is up almost 28 points from the pandemic low in April. While the U.S. is expanding faster, separate figures showed slower growth in the euro area and declining activity in Japan and Australia.
IHS Markit composite measures of U.S. orders and employment showed faster rates of expansion and exports picked up in earnest. A gauge of order backlogs jumped to the highest in data back to October 2009, a sign of further output gains in coming months and helping explain increased hiring.
“August data pointed to a further improvement in business conditions across the private sector as client demand picked up among both manufacturers and service providers,” Sian Jones, an economist at IHS Markit, said in a statement. “Notably, the renewed increase in sales among service sector firms was welcome news following five months of declines.”
The IHS Markit’s flash manufacturing PMI climbed to 53.6 this month, exceeding forecasts and the highest since January 2019, while the group’s services index rose to 54.8. That’s the first time since January that the service industry expanded and the strongest reading since March of last year.
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