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U.S. private sector output growth slows in June

Staff Writer |
U.S. private sector firms recorded a further solid expansion of business activity in June, but there was a loss of momentum since May.

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This was highlighted by the seasonally adjusted IHS Markit Flash U.S. Composite PMI Output Index falling from 53.6 to 53.0 in June.

The latest reading signalled the slowest upturn in business activity for three months.

Companies operating in both the service economy (‘flash’ business activity index at 53.0 in June) and manufacturing sector (‘flash’ output index at 52.9) experienced a growth slowdown since May.

The latest increase in manufacturing output was the least marked since September 2016.

There were more positive developments in terms of client spending, with private sector companies recording the sharpest rise in new work since January.

Greater sales volumes contributed to a rebound in business optimism to its strongest level since the start of 2017, with service providers particularly confident about their growth prospects for the next 12 months.

Staff recruitment also picked up in June, with payroll numbers expanding at the strongest pace for four months.

Meanwhile, input cost inflation remained softer than the 22-month peak seen in April.

However, average prices charged by private sector firms increased at the fastest pace so far this year.

A number of survey respondents cited efforts to alleviate squeezed margins in June.

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.

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