Business conditions across the Americas continued to improve at a modest, yet slower, pace during November, according to the latest survey data compiled by World Economics.
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The Headline Sales Managers Index (SMI) fell further to 52.0 in November, down from 52.8 in October to signal the slowest improvement in overall business conditions since the panel started in January 2013. Nonetheless, the index remained above the neutral 50.0 threshold that separates growth from contraction.
The SMI for the Americas (Canada, the U.S. and all major Latin American economies) is designed to provide the earliest monthly source of understanding about the speed and direction of economic activity in this dynamic region of the world. It is derived from indicators for business confidence, market growth, sales, prices and job levels.
November saw another slowdown in business activity in both the U.S. and Canada with the rates of expansion easing for the second and fourth successive months respectively. Latin America, meanwhile, continued to record a decline in business conditions.
Optimism towards the short-term outlook for business activity remained positive in November although the degree of positive sentiment expressed was the least marked on record. The Business Confidence Index fell to 54.4, down from 55.1 in October, signalling the weakest fall in four consecutive months of declines.
In particular, business confidence eased sharply in Canada while in the US confidence weakened again albeit at slower rate compared to the previous period. In Latin America, by contrast, the majority of companies remained pessimistic about future business activity due to lower exchange rates, rising inflation, unemployment and uncertainty over oil & raw material prices.
On the price front, November’s data highlighted a further easing in inflationary pressures, with the Prices Charged Index falling to 53.6 from 54.1 in October.
This marked the fifth consecutive month that the index has registered a decline and the lowest level since July 2013. Prices charged slowed, particularly, in the US, with the rate of inflation falling to the lowest on record. Elsewhere in Canada and Latin America, price levels rose at stronger rates.
Slower growth rates of sales and market expansion subsequently led companies in the Americas to shed jobs for the second month running in November.
However, the Staffing Index continued to indicate only a marginal decline in workforce numbers, with both Canada and Latin America reporting job losses whereas the US saw employment remained broadly stable from last survey period. ■