Dec 5, 2016 - New business growth accelerates to 12-month high in November ... Latest survey data signalled a continued
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Purchasing Managers’ Index™ MARKET SENSITIVE INFORMATION th
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Markit U.S. Services PMI™ – final data (with composite PMI™) New business growth accelerates to 12-month high in November Key findings: Robust and accelerated rise in new work
Business activity growth holds close to October’s 11-month peak Job creation edges up again in November
Data collected November 12-29
Service sector business activity (seasonally adjusted)
respondents noted that improved client confidence and a favourable domestic economic backdrop had helped to boost business activity in November. Latest survey data signalled a continued rebound in new business growth from the four-month low recorded in September. Moreover, the rate of expansion accelerated to its fastest since November 2015. Anecdotal evidence suggested that the launch of new projects and generally improving demand patterns had boosted new orders in November, alongside competitive pricing strategies. Payroll numbers increased again in November, with the rate of job creation reaching its strongest since July. However, the latest upturn in staffing levels was still weaker than the average recorded since the jobs recovery began in early-2010. A number of firms commented on efforts to boost capacity in line with long-term expansion plans and hopes of a sustained improvement in economic conditions. This in turn contributed to a reduction in backlogs of work for the first time in five months during November.
Source: IHS Markit.
U.S. service providers experienced a robust expansion of business activity in November, helped by the fastest rise in new work for one year. Greater workloads and resilient business confidence led to a further upturn in the pace of job creation from the three-and-a-half year low recorded in September. Meanwhile, input cost inflation eased slightly during November, which contributed to the slowest rise in average prices charged by service sector companies since April. The seasonally adjusted final Markit U.S. Services Business Activity Index registered 54.6 in November, to remain above the 50.0 no-change value for the ninth consecutive month. Although the latest reading was fractionally lower than in October (54.8), the rate of growth remained stronger than at any time in the first half of 2016. Survey
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There were signs of a squeeze on operating margins across the service economy in November, with input cost inflation close to the 15-month peak seen in October. Survey respondents attributed this to higher food prices and efforts by suppliers to pass on increased raw material costs. However, prices charged by service sector firms rose only slightly in November. Service providers remain upbeat about their growth prospects for the next 12 months. The latest reading was one of the strongest since late-2015, but down slightly from October’s recent peak. Survey respondents cited the end of the election cycle and improved economic conditions as driving positive sentiment in November. Markit Final U.S. Composite PMI™ At 54.9 in November, the seasonally adjusted final Markit U.S. Composite PMI™ Output Index was unchanged from October’s 11-month high and therefore signalled a further robust expansion of
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Markit Composite PMI and U.S. GDP
private sector business activity. Manufacturing production picked up at a sharp and accelerated pace in November (output index: 56.3), but this was offset by a fractionally slower expansion of service sector activity than in October. The composite index is based on original survey data from the Markit U.S. Services PMI and the Markit U.S. Manufacturing PMI.
Comment Commenting on the PMI data, Chris Williamson, Chief Business Economist at IHS Markit said: “The US economy is seeing robust growth, with the business surveys pointing to encouragingly solid rates of expansion in both manufacturing and services.
Sources: IHS Markit, U.S. Bureau of Economic Analysis.
“Looked at together, the two PMI surveys point to the pace of economic growth holding steady on October’s 11-month high, indicating that GDP is set to rise by 0.6% (2.5% annualized) in the fourth quarter. Both sectors are benefitting primarily from stronger domestic demand. “The solid business survey readings not only add to the widely held view that the Fed is near certain to raise interest rates at its December meeting, but also raise the prospect of more aggressive than previously anticipated interest rate hikes in 2017.”
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For further information, please contact: IHS Markit Tim Moore, Senior Economist Telephone +44-1491-461-067 Email
[email protected] Joanna Vickers, Corporate Communications Telephone +44207 260 2234 E-mail
[email protected]
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Note to Editors: The U.S. Services PMI™ (Purchasing Managers’ Index™) is produced by Markit and is based on original survey data collected from a representative panel of over 400 companies based in the U.S. service sector. Markit originally began collecting monthly PMI data in the U.S. service sector in October 2009. The final U.S. Services PMI follows on from the flash estimate which is typically based on approximately 85%–90% of total PMI survey responses each month and is designed to provide an accurate advance indication of the final PMI data. The Markit U.S. Services PMI complements the Markit U.S. Manufacturing PMI and enables the production of the Markit U.S. Composite PMI which tracks business trends across both the manufacturing and service sectors, based on original survey data collected from a representative panel of over 1,000 companies. The panel is stratified by North American Industrial Classification System (NAICS) group and company size, based on industry contribution to U.S. GDP. Survey responses reflect the change, if any, in the current month compared to the previous month based on data collected mid-month. For each of the indictors the ‘Report’ shows the percentage reporting each response, the net difference between the number of higher/better responses and lower/worse responses, and the ‘diffusion’ index. This index is the sum of the positive responses plus a half of those responding ‘the same’. Diffusion indexes have the properties of leading indicators and are convenient summary measures showing the prevailing direction of change. An index reading above 50 indicates an overall increase in that variable, below 50 an overall decrease. Markit do not revise underlying survey data after first publication, but seasonal adjustment factors may be revised from time to time as appropriate which will affect the seasonally adjusted data series. Historical data relating to the underlying (unadjusted) numbers, first published seasonally adjusted series and subsequently revised data are available to subscribers from Markit. Please contact
[email protected]. About IHS Markit (www.ihsmarkit.com) IHS Markit (Nasdaq: INFO) is a world leader in critical information, analytics and expertise to forge solutions for the major industries and markets that drive economies worldwide. The company delivers next-generation information, analytics and solutions to customers in business, finance and government, improving their operational efficiency and providing deep insights that lead to well-informed, confident decisions. IHS Markit has more than 50,000 key business and government customers, including 85 percent of the Fortune Global 500 and the world’s leading financial institutions. Headquartered in London, IHS Markit is committed to sustainable, profitable growth. IHS Markit is a registered trademark of IHS Markit Ltd. All other company and product names may be trademarks of their respective owners © 2016 IHS Markit Ltd. All rights reserved. About PMI Purchasing Managers’ Index® (PMI®) surveys are now available for over 30 countries and also for key regions including the eurozone. They are the most closely-watched business surveys in the world, favoured by central banks, financial markets and business decision makers for their ability to provide up-to-date, accurate and often unique monthly indicators of economic trends. To learn more go to www.markit.com/economics. The intellectual property rights to the U.S. Services PMI™ provided herein are owned by or licensed to IHS Markit. Any unauthorised use, including but not limited to copying, distributing, transmitting or otherwise of any data appearing is not permitted without IHS Markit’s prior consent. IHS Markit shall not have any liability, duty or obligation for or relating to the content or information (“data”) contained herein, any errors, inaccuracies, omissions or delays in the data, or for any actions taken in reliance thereon. In no event shall IHS Markit be liable for any special, incidental, or consequential damages, arising out of the use of the data. Purchasing Managers' Index™ and PMI™ are either registered trade marks of Markit Economics Limited or licensed to Markit Economics Limited. IHS Markit is a registered trademark of IHS Markit Ltd. If you prefer not to receive news releases from IHS Markit, please email
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