US growth slows to its lowest level in 547 days due to worsening supply delays: IHS Markit

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Increasing cases of new coronavirus have nearly stopped the U.S. economy earlier this year, disrupting businesses with supply chain delays and worsening staff shortages, and setting new limits to control the spread of Omicron variants. I am participating in the headwind of. , According to IHS Markit. However, there are some promising signals in the short-term outlook.

Adjusted for seasonal factors, the IHS Markit flash US Composite Purchase Manager Index (PMI) output, which covers both manufacturing and service industries, recorded 50.8 in January, a significant decrease from 57 in December. Did. The resulting increase in activity was negligible, the smallest since July 2020.

Therefore, the January Flash PMI showed annual growth in gross domestic product (GDP) near stall at the beginning of 2022, to the strong growth of 3.25-3.5% shown in the fourth quarter of 2021. Represents a remarkable contract.

According to IHS Markit, the increase in the number of new coronavirus cases has nearly stagnated the U.S. economy this year, disrupting businesses with supply chain delays and worsening staff shortages, and new restrictions to control the spread of Omicron variants. Is joining the headwinds of the company. .. However, there are some promising signals in the short-term outlook.

According to IHS Markit, both manufacturing and service companies in the United States have reported nearly stagnant production as a surge in viral cases associated with declining demand due to the Omicron wave.

Production was limited by the Omicron wave, but demand growth was somewhat resilient. New orders for goods and services recorded the weakest increase since December 2020, but continued to grow strongly.

The resulting gap between production and new orders is the second largest recorded in previous surveys, surpassing only the gap seen in October 2013 in the last 12 years. This reflects an unprecedented constraint on production volume recorded in January due to flare-ups. Precautionary measures for COVID-19 cases and associated virus containment.

However, the outlook differs between the two major sectors of the economy. The increase in new orders was mainly supported by the service sector. Manufacturers often saw weak customer demand restrained new sales growth in the face of resistance to rising prices.

New regulations and raw material shortages in major export markets have also led to a gradual recovery in new export orders. Thus, the influx of new businesses into the services sector was strong, just slightly weaker than the average seen in the fourth quarter of last year, but the growth in factory orders was the weakest since July 2020. It slowed down to.

Despite slowing demand growth in factories, the survey provided some promising news about supply chain crises, IHS Markit said.

Supply chain delays continued to show a sustained impediment to the pace of economic growth in relation to port congestion and transportation shortages, but overall supply chain degradation was seen for most of the second half of last year. It was relaxed compared to what was done.

Due to the impact of Omicron, the average delivery time for suppliers was slightly longer than in December, but the degree of delay was well below what was seen in most of the second half of 2021.

This trend, which in turn eases supply constraints, has helped to raise manufacturing optimism, in turn, to the highest level for over a year, and has also helped lower inflation in raw material prices.

Therefore, the overall easing of input cost pressures in January provides a tentative signal that US consumer price inflation will peak. Reserve policy objectives.

Lots of uncertainty and potential headwinds remain, but London-based IHS Markit pointed out. Cost inflation is chilling, but it is still very high, supported by high wages and rising energy costs, the latter of which can remain problematic in the face of heightened geopolitical tensions. The impact of Omicron on the Asian supply chain is still unclear.

Fiber2Fashion News Desk (DS)

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US growth slows to its lowest level in 547 days due to worsening supply delays: IHS Markit

Source link US growth slows to its lowest level in 547 days due to worsening supply delays: IHS Markit

The post US growth slows to its lowest level in 547 days due to worsening supply delays: IHS Markit appeared first on Eminetra.

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