Markit US manufacturing and services surveys for May 2021

Markit US composite

  • Record highs in services, manufacturing and composite (series began in 2009)
  • Prior was 64.7
  • Manufacturing 61.5 vs 60.2
  • Prior manufacturing was 60.5
  • Composite 68.1 vs 63.5 prior (pictured above)
  • Services new orders hit a record
  • Services input prices hit a record
  • Manufacturing new orders hit a record
  • Manufacturing order backlogs hit a record
  • Manufacturing business confidence hit a seven-month low on capacity and raw materials shortages

That's a huge beat on an important forward-looking indicator and wipes away some of the uneasy that's been in markets since the US jobs report.

Commenting on the PMI data, Chris Williamson, Chief Business Economist at IHS Markit, said:

"The US economy saw a spectacular acceleration of growth in May, the rate of expansion of business activity soaring well above anything previously recorded in recent history as the economy continued to reopen from COVID19 restrictions. The service sector saw an especially impressive surge in growth, beating all prior records by a wide margin, accompanied by another solid expansion of manufacturing output.

"Growth would have been even stronger had it not been for businesses often being constrained by supply shortages and difficulties filling vacancies.

"With businesses optimistic about the outlook, backlogs of orders rising sharply and demand continuing to pick up both at home and in export markets, the scene is set for strong economic growth to persist through the summer.

"The May survey also brings further concerns in relation to inflation, however, as the growth surge continued to result in ever-higher prices. Average selling prices for goods and services are both rising at unprecedented rates, which will feed through to higher consumer inflation in coming months."