US Services Sector Activity Quickens in November -- IHS Markit
December 03 2020 - 10:28AM
Dow Jones News
By Xavier Fontdegloria
Activity in the U.S. services sector gained momentum in
November, driven by upturns in output and new business despite the
surge in Covid-19 infections across the country, data from IHS
Markit showed Thursday.
The final reading for the U.S. Services Purchasing Managers'
Index for November was 58.4, up from the 56.9 reading in October
and above the earlier released flash estimate of 57.7.
Economists polled by The Wall Street Journal expected the final
services PMI to come in at 57.5, slightly down from its preliminary
reading.
The indicator confirmed the fourth consecutive monthly expansion
in service sector business in November and at a rate of growth that
accelerated compared to that of the previous months, IHS Markit
said.
The U.S. Services PMI is a survey-based measure of activity in
industries such as communications, finances or consumer services. A
level above 50 indicates expansion, while a reading below 50
signals contraction.
"November saw US business activity surge higher at a rate not
seen since early 2015 as companies enjoyed sharply rising demand
for goods and services," said Chris Williamson, chief business
economist at IHS Markit.
Contributing to the marked upturn in output was an accelerated
rise in new business at service providers, with a rate of growth
that was the fastest since April 2018. Output rose at the quickest
pace since March 2015, the report said.
In line with greater client demand, firms increased their
workforce numbers to a greater extent in November. "The recent
improvement in demand and the brightening outlook encouraged firms
to take on extra staff at a rate not previously seen since the
survey began in 2009, underscoring how increased optimism is
fuelling investment and expansion," Mr. Williamson said.
Business expectations strengthened in November, as service
providers were boosted by a faster expansion in new business and
hopes of a vaccine. The degree of confidence was the highest since
January 2014 and well above the long-run series average, IHS Markit
said.
Confidence has picked up considerably, with encouraging news on
vaccines coinciding with reduced political uncertainty following
the presidential election, hopes of greater stimulus spending and
fresh stock market highs, Mr. Williamson said.
IHS Markit said the Composite PMI Index was 58.6 in November, up
from 56.3 in October, as manufacturing and service sector firms
both recorded faster expansions in output. The rate of growth was
the sharpest since March 2015.
Write to Xavier Fontdegloria at xavier.fontdegloria@wsj.com
(END) Dow Jones Newswires
December 03, 2020 10:13 ET (15:13 GMT)
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