US manufacturing growth resumes in June, IHS Markit says

US services and manufacturing continued to improve last month even as some states reversed or paused previous decisions to reopen their economies, the results of two closely-followed surveys showed.

IHS Markit's services sector activity index rose from 47.9 in May to 49.6 for June (consensus: 51.0).

The same survey compiler's Purchasing Managers' Index for June meanwhile rose to 51.3 after a print of 49.8 for the previous month.

Notably, a gauge of output for both sectors came in at 50.0, up from 47.6 in May and putting an end to a five-month long streak of declining readings.

Nonetheless, new business in services was reportedly weighed down by reports of challenging demand conditions "with some struggling with the reintroduction of lockdown measures".

Among manufacturers on the other hand, new orders grew at their fastest pace since January.

Private sector firms also increased their hiring in July, interrupting a four-month streak of falling employment.

"The slight rise in workforce numbers was linked to the emergence of pressure on capacity, with backlogs of work increasing at a marginal pace," IHS Markit said.

Price pressures for both inputs and for finished products both recorded their steepest increases since October 2018.

Furthermore, firms from the two sectors both grew more confident in an increase in activity over the coming year amid hopes that the pandemic would end.

Commenting on June's survey results, IHS Markit chief business economist, Chris Williamson, said: "While the stabilisation of business activity in July is welcome news, the lack of growth is a disappointment. Moreover, a renewed acceleration in the rate of loss of new business raises concerns that demand is faltering. Many companies, notably in consumer-facing areas of the service sector, linked falling sales to re-imposed lockdowns."