U.S. Private Sector Continues Growth, Markit Index at Highest Level Since 2015
August 23 2017 - 11:13AM
Dow Jones News
By Bowdeya Tweh
Growth in service-based businesses helped a measure of
private-sector activity reach its highest level since May 2015,
according to a report released Wednesday.
The purchasing managers' flash U.S. composite output index
compiled by data provider IHS Markit rose to 56 in August from 54.6
in July.
Readings above the 50 mark separate expansion from
contraction.
New order growth, fueled by strong economic conditions, helped
lift the Flash U.S. Services Business Activity Index to reach a
28-month high in August. The index rose to 56.9 in August from 54.7
in July. Economists polled by the Wall Street Journal had forecast
a services flash reading of 54.9. In August service-sector
businesses also reported rising levels of new work and staff
expansions rose, despite seeing a rise in input costs.
Business conditions improved in the manufacturing sector, but
the pace of growth in August slowed from the prior month on weaker
increases in output and new orders. The Flash U.S. Manufacturing
PMI fell to 52.5 in August, down from 53.3 a month earlier.
Economists polled by the Wall Street Journal had forecast a
manufacturing flash reading of 53.
Chris Williamson, chief business economist at IHS Markit, said
although manufacturing remained sluggish in comparison with the
service sector, the acceleration in the overall economy "suggests
that GDP growth is still gaining momentum during the third
quarter." "With new order inflows also strengthening and job
creation equalling its best pace in the year-to-date, economic
growth should remain on course to outperform relative to the second
quarter," he said in prepared remarks.
Markit's flash reading is based on about 85% to 90% of total PMI
survey responses that go into the final report each month.
Write to Bowdeya Tweh at bowdeya.tweh@wsj.com
(END) Dow Jones Newswires
August 23, 2017 10:58 ET (14:58 GMT)
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