U.S. business activity growth expands at subdued pace in April, Markit Services PMI rises to 53.1

Business activity growth in the U.S. continues to expand at historically subdued rate in April. Business activity growth was sustained, but at a relatively modest rate, consistent with limited gains in new orders. With firms able to deal with current workloads, levels of staffing increased at the most subdued rate in almost seven years.

The seasonally adjusted Markit U.S. Services Business Activity Index remained above the 50 threshold, rising to 53.1 from 52.8 in March. Growth in activity has been registered in each survey period since March 2016. However, the pace of growth in April was below the survey average, which in part showed another month of relatively weakened growth in new business.

New orders recorded a rise in April, but this was attributed to successful advertising campaigns and bolstered market activity. Panellists are expecting such factors to underpin further growth in the coming 12 months. April’s survey showed that more than 34 percent of respondents are projecting a growth in activity, with the overall degree of sentiment the best in three months.

Service providers in the U.S. have hinted at a further rise in their average operating expenses in April. Furthermore, the pace of inflation accelerated for the second straight month in succession to reach its highest level since July 2015, noted Markit.