Growth of U.S. Business Activity Accelerates to Record High in April -- IHS Markit
By Xavier Fontdegloria
The expansion pace of business activity in the U.S. private
sector accelerated to a record-high in April, signaling that the
economic recovery gained further momentum at the beginning of the
The flash reading for the U.S. Composite Output Index stood at
62.2 in April, up from 59.7 in March, preliminary data from IHS
Markit showed Friday. The reading is the highest since data
collection began in October 2009, IHS Markit said.
The survey-record expansion of output in April came as looser
Covid-19 restrictions and strong client demand boosted business
The indicator is based on data from the firm's PMI surveys for
manufacturing and services sectors. In April, a steep upturn in
manufacturing production occurred despite unprecedented supply
chain disruptions, while services activity growth hit a new
"The U.S. economy is enjoying a strong start to the second
quarter, firing on all cylinders as loosening virus restrictions,
an impressive vaccine roll-out, a brighter outlook and stimulus
measures all helped boost demand," said Chris Williamson, chief
business economist at IHS Markit.
The upturn is broad-based, with both the service sector and
manufacturing expanding at solid rates. The latter was all the more
impressive, as factories continued to be throttled by unprecedented
supply-chain delays, he said.
IHS Markit's flash U.S. Services Business Activity Index came in
at 63.1 in April, up from 60.4 in March and a series record high.
Economists polled by The Wall Street Journal expected the indicator
to come in at 61.0.
Service providers reported a significant acceleration in new
business growth amid the reopening of large portions of the
economy, the report said. Average cost burdens continued to rise
markedly in April, and the rate of charge inflation quickened as
stronger client demand allowed firms to pass on a greater
proportion of increases in input prices to clients.
IHS Markit Manufacturing PMI was 60.6 in April, up from 59.1 in
March, reaching a record high. Economists expected the U.S.
Manufacturing PMI flash reading to increase to 60.5.
Manufacturers signaled a sharp rise in output during April, but
many firms stated that production capacity was hampered by an
inability to source raw materials and inputs in a timely manner,
the report said.
Meanwhile, input costs increased at the sharpest rate since July
2008. Higher input prices were reportedly due to severe supplier
shortages and marked rises in transportation fees, IHS Markit
"The worsening supply situation is a concern for the outlook,
especially in relation to prices," Mr. Williamson said. With record
supply-chain delays driving a rise in backlogs of uncompleted work
of a magnitude not surpassed for more than seven years, firms
appear to be struggling to boost operating capacity in the
near-term, he said.
Write to Xavier Fontdegloria at email@example.com
(END) Dow Jones Newswires
April 23, 2021 10:23 ET (14:23 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.