News Release

MARKET SENSITIVE INFORMATION

Embargoed until 0945 EDT (1345 UTC) 23 April 2024

S&P Global Flash US Composite PMI®

Output growth slows amid signs of demand weakness

Key findings: Output and demand

Flash US PMI Composite Output Index(1) at 50.9 The headline S&P Global Flash US PMI Composite
(March: 52.1). 4-month low. Output Index dropped to 50.9 in April from 52.1 in March.
Flash US Services Business Activity Index(2) at 50.9 Although continuing to signal an increase in business
(March: 51.7). 5-month low. activity during the month, the latest data indicated only a
slight expansion and one that was the softest since
Flash US Manufacturing Output Index(4) at 51.1
December. Nevertheless, output has now risen for 15
(March: 54.0). 3-month low.
consecutive months.
Flash US Manufacturing PMI(3) at 49.9 (March:
Slower increases in activity were recorded across both
51.9). 4-month low.
the manufacturing and services sectors, with rates of
Data were collected 11-22 April 2024. growth easing to three- and five-month lows respectively.
Output growth cooled in line with demand weakness as
new orders decreased for the first time in six months,
albeit dropping only modestly. Falling new business was
signalled among manufacturers and service providers
alike.
Some service providers suggested that elevated interest
rates and high prices had restricted demand during the
month. Meanwhile, manufacturers often linked lower new
orders to inflationary pressures, weak demand and
sufficient stock holdings at customers.
International demand held up slightly better than
domestic sales, with new export orders remaining
unchanged for the second month running.
Overview Concerns about their ability to secure new orders
US business activity continued to increase in April, but dampened firms’ confidence in the year-ahead outlook for
the rate of expansion slowed amid signs of weaker business activity in April. Business sentiment dipped to a
demand. The latest rise in output was the smallest in the five-month low, down in both manufacturing and services,
year-to-date reflecting reduced rates of growth and falling but remained positive overall amid hopes that market
orders in both the manufacturing and services sectors. conditions will pick up.
April saw an overall reduction in new orders for the first Employment
time in six months. Companies responded by scaling
back employment for the first time in almost four years, Signs of demand weakness impacted hiring plans at
with business confidence also waning to the lowest since companies in the US at the start of the second quarter. A
last November. number of survey respondents indicated that they had
held off on backfilling positions following the departure of
Rates of inflation generally eased at the start of the
staff. As a result, employment decreased for the first time
second quarter, with both input costs and output prices
since June 2020.
rising less quickly at the composite level. That said,
manufacturing input cost inflation hit a one-year high. The overall reduction in workforce numbers was centered
on services, where employment decreased solidly and to
the largest extent since mid-2020. In fact, excluding the

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opening wave of the COVID-19 pandemic, the decline in Although modest, the latest improvement in vendor
services staffing levels in April was the most pronounced performance was more pronounced than that seen in
since the end of 2009. In contrast, manufacturing March.
employment continued to increase modestly.
Finally, stocks of finished goods ticked higher following a
The drop in staffing levels partly reflected signs that fall in the previous month. According to respondents, the
current capacity was sufficient to handle workloads, with slight rise in post-production inventories reflected a
backlogs of work decreasing for the third month running slowdown in demand which left firms holding unsold
and to a larger degree than in March. goods.

Prices

Input prices continued to rise sharply in April, although Comment

the pace of inflation eased from the six-month high seen
Commenting on the data, Chris Williamson, Chief Business
in March. This was in spite of the fastest increase in
Economist at S&P Global Market Intelligence said:
manufacturing input costs for a year amid rising raw
material prices. Service providers often noted higher staff “The US economic upturn lost momentum at the start of
and shipping costs, though reported the second-lowest the second quarter, with the flash PMI survey
overall cost increase for three-and-a-half years. respondents reporting below-trend business activity
growth in April. Further pace may be lost in the coming
In line with the picture for input costs, output prices months, as April saw inflows of new business fall for the
increased at a solid but slower rate during April, the pace first time in six months and firms’ future output
of inflation cooling again having accelerated to a ten- expectations slipped to a five-month low amid heightened
month high in March. Prices charged inflation was in line concern about the outlook.
with the series long-run average, though still elevated by
“The more challenging business environment prompted
pre-pandemic standards. Slower charge inflation was
companies to cut payroll numbers at a rate not seen
seen across both the manufacturing and services
since the global financial crisis if the early pandemic
sectors.
lockdown months are excluded.
Manufacturing PMI “The deterioration of demand and cooling of the labor
market fed through to lower price pressures, as April saw
The S&P Global Flash US Manufacturing PMI posted
a welcome easing in rates of increase for selling prices
49.9 in April to signal broadly unchanged business for both goods and services.
conditions over the course of the month. The index was
down from 51.9 in March and ended a three-month “Notably, the drivers of inflation have changed.
sequence of improving operating conditions. Manufacturing has now registered the steeper rate of
price increases in three of the past four months, with
US manufacturers drew down their stocks of purchases factory cost pressures intensifying in April amid higher
for the second consecutive month in April, and to a solid raw material and fuel prices, contrasting with the wage-
degree that was the most marked since August last year. related services-led price pressures seen throughout
Firms made some efforts to limit the pace of depletion, much of 2023.”
however, raising their purchasing activity slightly following
a fall in the previous survey period.

There remained signs of spare capacity in supply chains

amid relatively muted demand for inputs. Suppliers’
delivery times shortened for the third month running.

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News Release

Contact
S&P Global Market Intelligence
Andrew Harker Katherine Smith
Economics Director Corporate Communications
S&P Global Market Intelligence S&P Global Market Intelligence
Telephone +44-1491-461-016 Telephone +1 (781) 301-9311
Email: andrew.harker@spglobal.com Email katherine.smith@spglobal.com

Notes to editors
Final April data are published on 1 May for manufacturing and 3 May for services and composite indicators.
The US PMI® (Purchasing Managers' Index™) is produced by S&P Global and is based on original survey data collected from a
representative panel of around 800 companies based in the US manufacturing and service sectors. The flash estimate is based on around
85% of total PMI survey responses each month and is designed to provide an accurate advance indication of the final PMI data.
The average differences between the flash and final PMI index values (final minus flash) since comparisons were first available in October
2009 are as follows (differences in absolute terms provide the better indication of true variation while average differences provide a better
indication of any bias):
Average Average difference
Index difference in absolute terms
Composite Output Index1 0.1 0.4
Manufacturing PMI3 0.0 0.3
Services Business Activity Index2 0.1 0.4

The Purchasing Managers’ Index™ (PMI®) survey methodology has developed an outstanding reputation for providing the most up-to-date
possible indication of what is really happening in the private sector economy by tracking variables such as sales, employment, inventories
and prices. The indices are widely used by businesses, governments and economic analysts in financial institutions to help better
understand business conditions and guide corporate and investment strategy. In particular, central banks in many countries (including the
European Central Bank) use the data to help make interest rate decisions. PMI™ surveys are the first indicators of economic conditions
published each month and are therefore available well ahead of comparable data produced by government bodies.
S&P Global do not revise underlying survey data after first publication, but seasonal adjustment factors may be revised from time to time as
appropriate which will affect the seasonally adjusted data series. Historical data relating to the underlying (unadjusted) numbers, first
published seasonally adjusted series and subsequently revised data are available to subscribers from S&P Global. Please contact
economics@spglobal.com.
Notes
1. The Composite Output PMI is a weighted average of the Manufacturing Output Index and the Services Business Activity Index.
2. The Services Business Activity Index is the direct equivalent of the Manufacturing Output Index, based on the survey question “Is the level of business activity at your company higher,
the same or lower than one month ago?”
3. The Manufacturing PMI is a composite index based on a weighted combination of the following five survey variables (weights shown in brackets): new orders (0.3); output (0.25);
employment (0.2); suppliers’ delivery times (0.15); stocks of materials purchased (0.1). The delivery times index is inverted.
4. The Manufacturing Output Index is based on the survey question “Is the level of production/output at your company higher, the same or lower than one month ago?”

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