Business activity continues to fall in the US
2022.11.23 10:24
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Business activity continues to fall in the US
Budrigannews.com – In November, the indicator of new purchases fell to the lowest level in the second and a half year, because the increase in interest rates slowed demand, and this led to a decrease in business activity in the United States for the fifth month. The global NYSE: on Wednesday reported a decline in the overall index of business activity in the US industry sector, tracking industry and the services sector, from the end of October to 46.3 this month.
A value above 50 means a reduction in private sectors. The movement is slowing down under the influence of a powerful period of rising Central Bank financing prices in the 1980s, designed to curb expansion by lowering the cash rate. In October, from the final value of 49.2, the aggregate index of new purchases fell to 46.4, the lowest since May 2020.
This was the lowest figure in 2009, not taking into account the initial wave of coronavirus. According to Chris Williamsson, Chief economic Economist at SP Global Market Intelligence, “companies report an increased obstacle associated with rising living costs, deteriorating financial conditions, in particular higher borrowing costs, as well as weakening demand for domestic and export markets.” However, in the fight against the crisis, there were some glimmers of enthusiasm. In October, from the final value of 67.0, the indicator of payment for raw materials by enterprises decreased by 65.7, the lowest since December 2019. This indicated the elimination of supply problems.
Also, enterprises reported discounts and benefits to invite customers to place orders, and prices for their products increased at the slowest pace in almost 2 years. In particular, this is due to a decrease in demand. This month’s data, indicating a significant slowdown in consumer inflation, as well as producer inflation at the end of October, coincide with moderate price indicators.
The index of business activity in the industrial sector decreased from 50.4 in October to 47.6 for this month, which is the lowest level since May 2020. According to a Reuters poll of economists, the index was 50. The manufacturer reported the first improvements in the work of suppliers in October 2019, although the pressure on prices continued to decrease, and muted orders remained.
But a decrease in the consumption of raw materials has often led to a reduction in the deadlines for the execution of orders. Although average raw material prices have been the slowest in the last 2 years, factories are still having trouble finding qualified workers. While the wage level remains low, this indicates a gradual slowdown in inflation.
The index of business activity in the service sector as a result of the survey decreased from 47.8 in October to 46.1 in November. Moreover, service providers reported that the demand for raw materials is low, and moderately low prices for raw materials are low.
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