US business activity shrank less in May as business reopen

New York City. Unemployment claims in the US have risen as the country went into lockdown to stem the coronavirus. AFP

US business activity shrank less in May than a month earlier as the economy began to emerge from coronavirus-related lockdowns, though output remained markedly weak.

The IHS Markit composite index of purchasing managers at manufacturers and service providers improved 9.4 points to 36.4, still the second-lowest in records back to 2009, the group reported Thursday. Readings below 50 indicate contraction, and the data are consistent with indexes for Europe, Japan and Australia that point to a worldwide recession.

IHS Markit composite measures of US orders and employment advanced in May, while a gauge of export demand showed only modest improvement and indicated lingering weakness in the global economy.

“Encouragement comes from the survey indicating that the rate of economic collapse seems to have peaked in April,’’ Chris Williamson, chief business economist at IHS Markit, said in a statement. “In the absence of a second wave of Covid-19 infections, the decline should moderate further in coming months as measures taken to contain the coronavirus are steadily lifted.’’

The IHS Markit gauge of services climbed to 36.9 this month from 26.7 in April, which was the lowest in records back to October 2009. The index of manufacturing rose to 39.8 from 36.1.