Defying predictions of further sluggishness in the final months of 2019 and contrasting with still slumping growth around the world, business activity in the U.S. appears to be accelerating.
Growth in both manufacturing and services accelerated in November, according to the IHA Markit composite Purchasing Managers Index. The so-called composite PMI, which measures business activity by surveying executives, rose to 51.9 in November, up from 50.9 in October.
That was better than economists expected. Readings above 50 indicate growth, while readings below indicate contraction.
Chris Williamson, chief business economist at IHS Markit, said the improvement “adds to evidence that the worst of the economy’s recent soft patch may be behind us.
The growth in manufacturing comes after months of worries that manufacturing could be entering a recession, weighed down by uncertainty over monetary and trade policies and lower global demand. IHS Markit noted that “manufacturers registered a solid rise in new orders that was the sharpest since April, with goods producers signaling a further recovery from the slowdown seen earlier in the year.”
Instead of weakness in the manufacturing sector spilling over into the services sector, the recovery in manufacturing is supporting growth in services.
“A recovery of manufacturing production growth to a ten-month high is especially welcome news, helping to lift service sector activity growth from recent lows,” said Williamson.