US private-sector firms remained optimistic in February although there was a broad divergence in business confidence trends, according to the IHS Markit US Business Outlook. While manufacturers registered the strongest degree of optimism in future production since October 2014, service providers were less upbeat than in the previous survey period.
“US private sector firms remained upbeat in February, with confidence regarding future output unchanged from that seen in October,” said Siân Jones, senior economist at IHS Markit. “Hopes of an end to the pandemic and resulting pick-up in demand drove optimism, but concerns regarding the longevity of the virus outbreak were still apparent.”
Overall expectations regarding employment improved in February, the research found. The net balance of firms forecasting a rise in staffing numbers rose to 19%, the highest for two years. The uptick in predictions was led by manufacturers. At 34%, the net balance of goods producers that expect workforce numbers to increase was the strongest since June 2012. The net balance of service providers anticipating higher employment was unchanged from that seen in October at 16%.
“As has been seen in recent national PMI surveys, price pressures and supplier shortages were key concerns for companies,” Jones said. “Manufacturers and service providers alike foresee sharp upticks in staff and non-staff costs. That said, goods producers were much more confident of being able to pass on a greater proportion of the price rise.”
Overall, manufacturers were more confident of a recovery in operating conditions than their service-sector counterparts as ongoing social-distancing and travel restrictions continued to hamper demand for services.
Source: Staffing Industry Analysts