Preliminary
data released by IHS Markit on Wednesday pointed to further solid growth in business
activity during September, albeit one that was slightly weaker than seen in
August.
According to
the report, the Markit flash manufacturing purchasing manager's index (PMI)
came in at 53.5 in September, up from 53.1 in August. That was the highest
reading since January 2019. Economists had expected the reading to stay at 53.1.
A reading above 50 signals an expansion in activity, while a reading below this
level signals a contraction. The overall upturn was underpinned by a quicker
rise in production at manufacturers, with a further increase in new orders and
the resumption of operations at clients helping drive growth.
Meanwhile, the
Markit flash services purchasing manager's index (PMI) fell to 54.6 in
September from a 17-month high of 55.0 in the previous month. Nonetheless, the
rate of expansion was the second-fastest since March 2019 and solid overall. Economists
had expected the reading to drop to 54.7. The rate of new business growth was
the strongest for 18 months, while employment continued to increase solidly,
albeit at a softer pace than in August following a slower upturn in backlogs of
work.
Overall, IHS
Markit Flash U.S. Composite PMI Output Index came in at 54.4 in September, down
slightly from 54.6 in August, signaling a strong
expansion in the U.S. private sector’s business activity.
“US businesses
reported a solid end to the third quarter, with demand growing at a steepening
rate to fuel a further recovery of output and employment”, Chris Williamson,
Chief Business Economist at HIS Markit noted. “The survey data, therefore, add to
signs that the economy will have enjoyed a solid rebound in the third quarter
after the second-quarter slump. The question now turns to whether the economy’s
strong performance can be sustained into the fourth quarter.”
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