Surveys of purchasing managers from Asia to Europe, and in the U.S., show business activity contracting, with little sign of a turnaround anytime soon.
U.S. private-sector business contracted for a second straight month in August and is at its weakest in 18-months, with notable weakness in the services sector. S&P Global's flash composite Purchasing Managers' Index (PMI) for August dropped to 45 this month — the lowest since May 2020 — from a final reading of 47.4 in July. Any reading below 50 suggests a contraction.
European business activity also declined for a second month in a row, amid a steep rise in energy prices. The eurozone flash PMI fell to 49.2 in August from 49.9 in July, hitting an 18-month low. Businesses in both manufacturing and services reported a decline in new orders pointing to future weakness.
S&P Global’s surveys indicated that private-sector activity in Japan and Australia also declined in August for the first time since a wave of new COVID-19 infections at the start of the year.