U.S. Business Activity Growth Eases in June -- IHS Markit
By Xavier Fontdegloria
U.S. private sector business activity continued to expand at a
solid pace in June amid boosted new orders, but the rate of growth
softened compared with the record-high registered in May.
The flash reading for the U.S. Composite Output Index decreased
to 63.9 in June from 68.7 in May, according to preliminary data
from IHS Markit released Wednesday.
The indicator is based on data from the firm's PMI surveys for
manufacturing and service sectors. In June, both the manufacturing
and services sector expansion moderated amid difficulties to hire
staff and supplier delays.
"While both output growth and inflows of new orders have come
off their peaks in both manufacturing and services, this is as much
due to capacity constraints limiting firms' abilities to cope with
demand rather than any cooling of the economy," said Chris
Williamson, chief business economist at IHS Markit.
IHS Markit's flash U.S. Services Business Activity Index was
64.8 in June, down from 70.4 in May. Economists polled by The Wall
Street Journal expected the indicator to come in at 70.0.
Service sector activity was supported by a further significant
rise in new business as Covid-19 restrictions were relaxed further,
although slower than that seen in May. Struggles among companies to
find suitable workers hampered employment growth, the report
The IHS Markit Flash Manufacturing PMI climbed to 62.6 in June
from 62.1 in May, beating economists expectations of a fall to 61.5
and a new series record high.
Rates of output and new order growth remained above the series
average, but the softer rise in production was linked to supplier
delays and difficulties finding workers.
Average supplier delivery times for goods producers lengthened
to the greatest extent on record, IHS Markit said.
Price pressures remained elevated in June for both manufacturers
and service providers, and higher costs were passed on to
"While the second quarter will likely represent a peaking in the
pace of economic growth, a concomitant peaking of inflation is far
less assured," Mr. Williamson said.
Write to Xavier Fontdegloria at firstname.lastname@example.org
(END) Dow Jones Newswires
June 23, 2021 10:20 ET (14:20 GMT)
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