The US economy has lost significant momentum as a result of the Coronavirus outbreak, according to a survey by the IHS Markit Financial and Economic Reporting Group in London in December.
According to final data released on Wednesday, the BMI Composite Purchasing Managers’ Index (BMI) from manufacturing and services data fell 55.3 points from 58.6 in November, its highest in 68 months and five and a half years.
The final BMI value in December was lower than the previously reported 55.7 points predicted by analysts.
The Services PMI fell to 54.8 in December from a 58-year high of 58.4. The final figure for the month of December is much weaker than the 55.3 points announced and forecast by analysts.
A BMI value above 50 points indicates an increase in the performance of the examined economic activity, and a value below 50 points indicates a contraction. A higher value above 50 points reflects an acceleration of the growth rate and a lower value reflects a slowdown.
Commenting on the survey results, Chris Williamson, chief economist at IHS Markit, noted:
Data still indicated that GDP grew at a relatively strong pace in the fourth quarter, but the near-term outlook deteriorated.
Compared to November, the business outlook for 2021 has deteriorated dramatically as the post-election recovery slows and businesses increasingly concerned about the effects of the coronavirus pandemic.
The increase in the number of people infected with the virus poses an increased risk to the economy in the coming weeks, and hopes are greatly fueled by economic stimulus measures to prevent another crisis. Due to the intensification of the epidemic, orders, production and employment grew at a much slower pace in December. Williamson said the slowdown was particularly evident in the services sector as a result of tightening societal distance rules, adding that as effective vaccines are developed and made widely available, companies have greater confidence that life will return to normal in the second half of the year.
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