Wednesday, May 7, 2025

US Business Activity Slumps to 8-Month Low Amid Worsening Material, Labour Shortages

Business activity across the US continues to decline, as an increasing number of businesses and companies face worsening material and labour shortages.

The latest IHS Markit flash composite index of purchasing managers at services and manufacturers for August slumped from 59.9 to 55.4, marking a steady monthly decline since soaring to a record-high of 68.7 in May. Similarly, the index’s reading of services activity also slowed in August, falling to the slowest pace since December.

On the other hand, the index showed that both input and output prices soared to the highest level on the survey’s record, as inflationary pressures continue to mount. The composite index of input prices soared to the second-highest reading on records dating back to 2009, while the measure of prices received also rose in August. Companies across the US struggle to fill positions that were previously vacated during the pandemic, further adding to rising inflationary pressures. In the meantime, global supply chain disruptions create added headaches when it comes to sourcing materials.

“Not only have supply chain delays hit a new survey record high, but the August survey saw increasing frustrations in relation to hiring,” explained IHS Markit chief business economist Chris Williamson in a statement. “Jobs growth waned to the lowest since July of last year as companies either failed to find suitable staff or existing workers switched jobs.”

Information for this briefing was found via IHS Markit. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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