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U.S. companies signal increased output for third month

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Staff Writer | August 24, 2016
U.S. goods producers saw a further upturn in overall business conditions during August, though the rate of improvement was softer than seen in July.
U.S. companies
America   Markit Flash U.S. Manufacturing PMI
While output continued to rise markedly, total new work rose at a slower pace and employment expanded at the weakest rate in four months.

Meanwhile, companies reported near-stagnant price trends overall, with input prices rising only marginally and companies leaving their prices charged unchanged from the previous month.

The seasonally adjusted Markit Flash U.S. Manufacturing Purchasing Managers’ Index (PMI) registered at 52.1 in August, down from July’s nine-month high of 52.9. The PMI has now pointed to improving business conditions in each month since October 2009.

However, August’s reading pointed to a moderate rate of improvement that was weaker the post-crisis average.

A further solid increase in output was the most positive influence on the latest PMI reading.

In contrast, slower growth in total new work and employment, alongside further cuts to inventories, had dampened the overall headline figure.

U.S. manufacturers signalled increased output for the third month running in August. Furthermore, the rate of expansion remained solid overall, having edged up slightly from July to a nine-month high.

Anecdotal evidence suggested that new product launches, stronger underlying demand and new marketing strategies had supported production growth in August.

Although solid growth of output was sustained, total new orders expanded at a slower rate in August. Data indicated that relatively subdued domestic demand was a reason behind softer growth in overall new work, as export sales increased at the fastest pace in 23 months.

While some companies commented that a number of clients had adopted a wait-and-a-see approach until the outcome of the presidential election, others mentioned that total new work had been boosted by new foreign client wins over the latest survey period.