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Strong upturn in U.S. private sector output continues

Staff Writer |
March data revealed another strong increase in private sector output, together with a further solid payroll gain and elevated price pressures.

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At 54.3 in March, down from 55.8 in the previous month, the seasonally adjusted IHS Markit Flash U.S. Composite PMI Output Index has remained above the 50.0 no-change threshold for just over two years.

The latest upturn in business activity was faster than the average over this period, driven by solid rises in both manufacturing production and service sector output.

There were also positive signals for the near-term growth outlook, with new order volumes expanding at a strong pace and payroll numbers picking up to the greatest extent since May 2015.

Moreover, business confidence towards growth prospects over the coming 12 months remained among the highest seen over the past three years.

The latest survey signalled another robust increase in average cost burdens across the private sector economy, with the rate of input price inflation unchanged from February’s 52-month peak.

In the manufacturing sector, input price pressures were the greatest for six-and-half years.

A combination of sharply rising operating expenses and resilient demand conditions contributed to another marked increase in average prices charged by private sector companies.

March data indicated the second-fastest rate of output charge inflation since September 2014.

The composite index is based on original survey data from the IHS Markit U.S. Services PMI and the IHS Markit U.S. Manufacturing PMI.

The seasonally adjusted IHS Markit Flash U.S. Services PMI Business Activity Index posted 54.1 in March, down from February’s six-month high of 55.9.

Nonetheless, the latest reading was well above the neutral 50.0 value and signalled a further solid expansion of service sector output.

Service providers recorded another robust rise in new business during March, with the rate of expansion holding close to February’s near threeyear high.

Greater workloads helped to underpin the strongest job creation since September 2015.

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