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  • Writer's pictureStephen H Akin

Output growth hits 26-month High

Updated: Jun 21

US PMI Composite Output Index edged higher from 54.5 in May to 54.6 in June

photo of market data board
Akin Investment

Key findings:

Flash US PMI Composite Output Index(1) at 54.6 (May: 54.5). 26-month high.

Flash US Services Business Activity Index(2) at 55.1 (May: 54.8). 26-month high.

Flash US Manufacturing Output Index(4) at 51.9 (May: 53.0). 2-month low.

Flash US Manufacturing PMI(3) at 51.7 (May: 51.3). 3-month high.

Data were collected 12-20 June 2024.


US business activity growth accelerated to its fastest for 26 months in June, according to provisional PMI survey data from S&P Global, signalling a strong end to the second quarter. The service sector led the upturn with additional support from manufacturing, albeit with the latter’s recent revival losing some momentum.

Improved business confidence for the year ahead, notably in the service sector, as well as renewed pressure on operating capacity from rising demand, meanwhile encouraged firms to boost payroll numbers for the first time in three months.

The survey’s gauge of selling price inflation meanwhile fell, linked to slower growth of input costs, to point to a moderation of inflationary pressures.

Employment and capacity

Employment rose for the first time in three months, reviving after declines seen in April and May to register the largest gain for nine months. Service sector payrolls rose to the greatest extent for five months, helping reverse some of the declines seen in the sector over the prior two months, and manufacturing payrolls were increased at the sharpest rate for 21 months.

Despite the rise in employment, backlogs of work rose for the first time since January. Higher backlogs were often blamed on insufficient capacity relative to demand growth, especially in the service sector. These higher backlogs were in turn often associated with labor supply difficulties, which continued to thwart hiring in some cases.

Manufacturing PMI

The S&P Global Flash US Manufacturing PMI rose from 51.3 in May to 51.7 in June to signal an improvement in business conditions within the goods-producing sector for a second successive month, and for the fifth time in the past six months. Although below readings seen in February and March, the latest PMI is the third-highest recorded over the past 21 months.

photo of PMI Chart

New orders and employment made increasingly positive contributions to the PMI compared to May, and suppliers’ delivery times and inventories moved from being drags to providing positive support to the PMI. The positive contribution from production moderated, however, offsetting some of the gains from the other four components.


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