U.S. Business Activity Accelerates in November Despite Virus Resurgence -- IHS Markit
By Xavier Fontdegloria
Business activity in the U.S. accelerated in November to a more
than five-year high despite the surge in coronavirus infections and
tightening restrictions, preliminary data from IHS Markit showed
The flash reading for the U.S. Composite Output Index was 57.9
in November, up from the 56.3 registered in October. The reading
signals that growth momentum picked up further at the fastest rate
since March 2015, IHS Markit said.
The indicator is based on data from the firm's PMI surveys for
manufacturing and services sectors. An index reading above 50
indicates expansion, while below 50 it signals contraction.
In November, both manufacturing and services sectors remained in
expansion territory and indicated a steeper upturn in output, data
"The upturn reflected a further strengthening of demand, which
in turn encouraged firms to take on staff at a rate not previously
seen since the survey began in 2009," said Chris Williamson, chief
business economist at IHS Markit.
IHS Markit's flash U.S. Services Business Activity Index was
57.7 in November, up from 56.9 in September. Economists polled by
Dow Jones expected the indicator to come in at 55.0.
Contributing to the steep rise in business activity was a faster
increase in new orders at service providers, and one that was the
quickest since September 2018.
Firms also registered a sharp increase in employment during the
month. The boost to service sector workforces was the most marked
since data collection began in October 2009, as rising demand
spurred on hiring, IHS Markit said.
As for the manufacturing sector, IHS Markit PMI stood at 56.7 in
November, up from October's 53.4 level. Economists expected the
U.S. Manufacturing PMI flash reading to slightly slip to 53.0. This
is the strongest improvement in operating conditions since
Manufacturers registered a marked expansion in output, largely
driven by a notable uptick in new business as demand conditions
improved. Moreover, the rise in production was the fastest since
March 2015, with some firms noting a greater ability to complete
orders as they were received, the report said.
Improved hopes of a vaccine against Covid-19 and an end to
election uncertainty, led to the greatest degree of optimism for
the year ahead since May 2014.
"Expectations about the year ahead have surged to the most
optimistic for over six years, reflecting the combination of a
post-election lift to confidence and encouraging news that vaccines
may allow a return to more normal business conditions in the not
too distant future," Mr. Williamson said.
Write to Xavier Fontdegloria at email@example.com
(END) Dow Jones Newswires
November 23, 2020 10:18 ET (15:18 GMT)
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