U.S. business optimism second-highest since June 2014
Staff Writer |
The latest IHS Markit U.S. Business Outlook survey signals a slightly weaker degree of optimism towards the outlook for output over the coming year.
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The net balance +39% was below the series average (+42%), but nonetheless the second-highest in four years and above the average for developed markets (+34%).
Stronger expectations were influenced by greater client demand and interest from new customers.
Panellists also mentioned new product development and increases in marketing as reasons for optimism.
That said, some firms state that tariffs, supplier delivery delays and rising input costs led to concerns over the direction of future business activity.
Manufacturing and service sector firms are confident regarding new business opportunities over the coming 12 months.
Although the level of positive sentiment dipped slightly among service providers, goods producers’ confidence picked up from February’s recent low.
Meanwhile, predictions regarding profitability and investment improved in June.
Business revenue expectations are the second-highest in four years, with the net balance for profitability rising to the greatest since February 2014.
U.S. firms are slightly more hesitant compared to the previous survey period with regards to hiring plans.
The net balance (+22%) of companies expecting a rise in employment is nonetheless the second-highest since February 2014.
At the sector level, manufacturers foresee a stronger increase in staffing levels compared to February’s 12- month low.
U.S. service providers, in contrast, are less confident with regards to job creation.
However, services sector firms are driving more positive predictions towards capital investment over the coming year as manufacturers moderated their expectations slightly.
Overall, the net balance (+12%) is the strongest for a year.
U.S. private sector firms forecast a strong rise in input prices over the coming 12 months.
However, the net balance (+20%) is down slightly from February, and is weaker than at the global level (+27%).
Manufacturers expect a faster rise in input costs compared to service providers.
U.S. firms also expect a further increase in output charges in the next 12 months as they seek to protect margins given forecasts of further cost inflation.
The net balance (+17%) of firms forecasting an increase is in line with the series trend, with manufacturers anticipating the stronger rise in charges.
Profitability predictions improved, with the net balance of firms expecting a rise in profits (+38%) the highest since February 2014.
Anticipated growth in services providers’ profits is close to February’s four-year peak.
Finally, expectations towards business revenues indicate firms forecast a strong rise in growth, with the net balance (+38%) the second-highest in four years.