US private sector output growth picks up slightly in July

24th Jul 2024 15:15

(Sharecast News) - Private sector activity in the US held up well in July, even as factory output shrank for the first time since January, survey results revealed.

S&P Global's 'composite' output index for manufacturing and services combined edged up from a reading of 54.8 for June to 55.0 in July.

However, whereas the purchasing managers' index for services improved from 55.3 to 56.0, that for manufacturing slipped from 51.6 to 49.5.

Commenting on the survey results, Chris Williamson, chief business economist at S&P Global Market Intelligence, said: "The flash PMI data signal a 'Goldilocks' scenario at the start of the third quarter, with the economy growing at a robust pace while inflation moderates.

Williamson nonetheless expressed caution regarding the "worrisome" skew, given the renewed contraction in factory output.

Some of that was the result of staff shortages and might therefore prove temporary, but there was heightened uncertainty around the elections, which was dampening investment and hiring.

So too, he said, faster increases in input prices due to raw materials together with shipping and labour costs might filtre through to selling prices if sustained or weigh on margins.