Preliminary
data released by IHS Markit on Friday revealed that U.S. private sector
business activity continued to grow in early November, albeit at a slower pace
than in October, as the rate of expansion of the service sector slowed.
According
to the report, Markit flash services purchasing manager's index (PMI) fell to 57.0
in early November from 58.7 in the previous month. Economists had expected the reading
to increase to 59.0. A reading above 50 signals an expansion in activity, while
a reading below this level signals a contraction. The output in the service
sector rose in November, being supported by greater travel and the further relaxing
of the coronavirus restrictions. In addition, new business demonstrated solid
growth, as firms acquired new clients and new projects, but the pace of
increase slowed to the weakest since August 2020. Meanwhile, employment growth
was constrained by challenges finding suitable candidates. On the price front, the
rate of increase in input prices accelerated to a six-month high, while the
rate of increase of output charges hit a fresh all-time high.
At
the same time, the Markit flash manufacturing purchasing manager's index (PMI) came
in at 59.1 early this month, raising from October’s ten-month low of 58.4. Economists had expected the reading to increase to 59.0.
Despite persistent raw material delays and labour shortages, the rise in factory
output fastened, supported by a sharper pace of growth of inflows of new orders.
At the same time, employment in the manufacturing sector rose at the slowest
pace so far this year due to challenges hiring suitable workers, and the accumulation of backlogs of work accelerated on the back of severe lengthening of input delivery
times. On the price front, input costs burdens rose at a record pace in
November, while selling prices increased at the second-steepest pace in over
14-and-a-half years.
Overall,
IHS Markit Flash U.S. Composite PMI Output Index stood at 56.5 in November, down
from 57.6 in October.