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US private sector posts weakest output growth since May 2017


According to Market Intelligence, December 2022


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US private sector posts weakest output growth since May 2017

U.S. private sector output expanded at its weakest pace in more than a year as a slowdown in service sector growth offset a strong increase in manufacturing production, IHS Markit reported.

The seasonally adjusted IHS Markit flash U.S. composite PMI output index hit its lowest level since May 2017, falling to 53.6 in early December from 54.7 in the previous month. An index reading above 50 indicates overall growth.

The flash services PMI business activity index dropped to an 11-month low of 53.4 from 54.7. The flash manufacturing PMI also slumped to a 13-month low, falling to 53.9 from 55.3.

The flash manufacturing output index was unchanged at 54.3, although the near-term outlook has become less favorable amid weaker growth in new business orders, IHS Markit said.

"New order inflows hit the lowest since April of last year, and expectations regarding future business growth have slipped to the lowest for two-and-a-half years," IHS Markit chief business economist Chris Williamson said, noting that output growth may continue to fade going into 2019.

"The surveys reveal greater caution in relation to spending amid uncertainty about the economic outlook, linked in part to growing geopolitical concerns and trade wars," Williamson added.