03:00 PM EST, 12/16/2024 (MT Newswires) -- US private-sector output rose at the fastest pace since March 2022 in December despite a steepening contraction in manufacturing as the service sector boomed, according to S&P Global's ( SPGI ) flash purchasing managers' index released Monday.

The composite output index rose to 56.6 this month from 54.9 in November and surpassed the 55.1 consensus in a survey compiled by Bloomberg. The 50-point mark separates expansion from contraction. While the index has registered growth since February 2023, activity accelerated in the second half of 2024, the survey showed.

Service sector output jumped to 58.5 in December -- the fastest pace since October 2021 -- from 56.1 last month, while the manufacturing PMI slid to a three-month low of 48.3 from 49.7. Wall Street was looking for 55.8 and 49.5, respectively.

"Business is booming in the US services economy, where output is growing at the sharpest rate since the reopening of the economy from COVID lockdowns in 2021," S&P Global Market Intelligence Chief Business Economist Chris Williamson said. "It's a different picture in manufacturing, however, where output is falling sharply and at an increased rate, in part due to weak export demand."

Total private-sector new orders rose at the "sharpest rate" since April 2022, driven by the service sector, S&P Global ( SPGI ) said.

Outlooks improved, however, and private-sector employment notched its first increase in five months amid gains in both services and manufacturing jobs, according to S&P Global ( SPGI ).

Yeah-ahead optimism regarding output improved in December to its highest level since May 2022 in what S&P Global ( SPGI ) said likely reflected a "clearing of uncertainty" following the US election. Anecdotal evidence from survey respondents suggested "expectations of a more business friendly administration under the Trump presidency, especially in terms of looser regulation and heightened protectionism," the company said.

"However, some of the high spirits seen after the election in the manufacturing sector have been

checked over concerns surrounding tariffs and the potential impact on inflation resulting from the higher cost of imported materials," Williamson said.

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