US Business Activity Picks Up in June as PMI Rises to Five‑Month High

U.S. business activity accelerated in June, with the Flash Composite PMI Output Index climbing to 52.2 from 51.5—the highest level in five months. Manufacturing led the improvement, as the Manufacturing PMI rose to 55.7 from 55.1, marking a 49‑month high, while the Manufacturing Output Index jumped to 57.7 from 56.6, the strongest reading in nearly five years. Services also showed modest growth, with the Services PMI Business Activity Index edging up to 51.3 from 50.7, a four‑month peak.

According to S&P Global’s Chris Williamson, improved sentiment following progress toward peace in the Middle East helped bolster business confidence. However, he cautioned that overall expansion remains subdued relative to pre‑conflict trends, aligning with an annualized growth rate of just over 1% in the second quarter. Services activity continued to be constrained by consumer resistance to higher prices and weak confidence. In contrast, manufacturing growth was supported by inventory building as firms sought to protect against supply disruptions. Supply delays widened during June, indicating lingering supply‑chain concerns.

The labor market remained the weakest segment of the report. Williamson noted that employment fell again, with manufacturing job losses accelerating at their fastest pace since 2009—excluding the pandemic period. Businesses are increasingly wary of the sustainability of recent demand growth and the impact of rising raw‑material costs. Nonetheless, some relief on the inflation front emerged. While input cost pressures stayed elevated by historical standards, June data showed signs of cooling, aided in part by lower energy prices toward the end of the survey period.

Indicator May June Change

Composite PMI Output Index 51.5 52.2 ↑ 0.7
Services PMI Business Activity Index 50.7 51.3 ↑ 0.6
Manufacturing PMI 55.1 55.7 ↑ 0.6
Manufacturing Output Index 56.6 57.7 ↑ 1.1

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