US Private Sector Output Hits 5-Month High as Manufacturing Logs Strong Growth, S&P Survey Shows

12:02 PM EDT, 06/23/2026 (MT Newswires) -- US private-sector output rose in June at the fastest pace in five months amid a solid expansion in the manufacturing sector, according to S&P Global's (SPGI) flash purchasing managers' index released Tuesday.

The composite output index rose to 52.2 this month from 51.5 in May, compared with a 52.1 reading in a survey compiled by Bloomberg. The 50-point mark separates expansion from contraction.

The manufacturing PMI hit a 49-month high of 55.7 from 55.1, while the gauge for services activity advanced to a four-month high of 51.3, up from 50.7. The consensus was for readings of 54.6 and 51.1, respectively.

"Brighter news out of the Middle East has helped restore some confidence among US businesses in June, though the overall rate of economic growth signaled by the flash PMI survey remains relatively sluggish compared to that seen earlier in the year in the lead up to the conflict," S&P Global Market Intelligence Chief Business Economist Chris Williamson said in the report.

Last week, the US and Iran signed a memorandum of understanding to end their war and reopen the Strait of Hormuz -- the world's most important chokepoint for crude oil flows -- after more than three months of hostilities that fueled a rally in energy prices, stoking worries over inflation.

"The survey signals that current output levels are consistent with the economy struggling to grow much faster than a 1% annualized rate in the second quarter," Williamson said. "The service sector continues to grow at an especially subdued pace, reflecting push-back from customers over high prices amid low levels of consumer confidence in particular."

Service providers saw only a modest improvement in output and new orders, though they received some boost from the World Cup event, according to the report.

Manufacturing output expanded at the strongest pace since July 2021, buoyed by the largest rise in new orders in more than four years, the report said.

"While there is better news from the manufacturing sector, we remain concerned as factory growth continues to be temporarily buoyed by inventory building amid supply fears," Williamson said. "Supply delays grew more widespread in June."

The manufacturing sector saw a further fall in employment, with factory job cuts seen running at the highest since 2009 if the pandemic is excluded, according to Williamson. On a positive note, he said that input cost inflation cooled this month partly due to lower energy prices seen before the survey data collection period ended.

Last week, the Institute for Supply Management projected continued expansion this year for both the US manufacturing and services sectors despite macro and other headwinds.

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