PMI composite in-line with forecast, ISM services steady in August

August PMI data signalled a strong expansion in business activity across the U.S. service sector, as output rose at the sharpest rate for nearly one and a half years. The upturn was driven by greater client demand, as new orders grew at the quickest pace for over a year. As a result, firms increased their workforce numbers sharply to cope with greater pressure on capacity. Although business expectations ticked down slightly, firms remained optimistic on balance, with sentiment regarding the year ahead at its second-highest since April 2019.

Meanwhile, input cost inflation eased slightly, though nonetheless remained sharp. Increased supplier prices, including for PPE, were partially passed on to clients through a second month of marked growth of charges.

The seasonally adjusted final IHS Markit US Services PMI Business Activity Index registered 55.0 in August, up notably from 50.0 in July and slightly higher than the earlier 'flash' estimate of 54.8. The latest expansion was strong overall and the quickest since March 2019. Firms often stated that the upturn in output was due to greater client demand and the further reopening of businesses. 


Meanwhile...

Economic activity in the services sector grew in August for the third month in a row, say the nation's purchasing and supply executives in the latest Services ISM^® Report On Business^®.
 
The report was issued today by Anthony Nieves, CPSM, C.P.M., A.P.P., CFPM, Chair of the Institute for Supply Management^® (ISM^®) Services Business Survey Committee: "The Services PMI^™ (formerly the Non-Manufacturing NMI^®) registered 56.9 percent, 1.2 percentage points lower than the July reading of 58.1 percent. This reading represents growth in the services sector for the third straight month and the 125th time in the last 127 months, with the exception of April's and May's contraction.