US private sector activity contracted in August for the second straight month and hit the weakest point in 18 months, with particular weakness in the services sector as demand weakened in the face of inflation and tighter financial conditions.
S&P Global’s preliminary Composite Purchasing Managers’ Index (PMI) for August dropped to 45 — the lowest since February 2021 — from a final reading of 47.7 in July. A reading below 50 indicates contraction in activity.
The drop was most notable in services, as the sector PMI dropped to 44.1 from 47.3 last month. The industry index still showed a modest expansion of 51.3, up from 52.2 in July.
Both results were the lowest since mid-2020 and were also below the estimate in a Reuters poll. The expectation for the PMI for services was 49.2, while for the industry it was 52.
“Material shortages, delivery delays, interest rate hikes and strong inflationary pressures served to dampen customer demand, according to respondents,” the report said.
Source: CNN Brasil
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