NEW YORK (Reuters) – U.S. business activity snapped back to the highest since early 2019 this month as companies in both the manufacturing and services sectors saw a resurgence in new orders even as new COVID-19 cases remain stubbornly high across the country, a purchasing managers’ survey showed on Friday.

Data firm IHS Markit said its flash U.S. Composite PMI Index rose to a reading of 54.7 this month – the highest since February 2019 – from 50.3 in July. Its flash – or preliminary – indicator for the manufacturing sector stood at its highest since January 2019 and for the services sector it was the highest since March 2019.

A reading above 50 indicates growth in private sector output. The economy fell into recession in February as the coronavirus began to spread rapidly around the United States, triggering widespread business shutdowns and stay-at-home orders.

“Driving the overall upturn in output was stronger client demand,” Markit said in its report. “Total new business rose for the first time since February and at a solid rate. Manufacturing firms registered a steeper expansion in new order inflows than in July, while service providers signaled a renewed increase in sales.”

The survey’s flash composite new orders index climbed to 54 in August – the highest since March 2019 – from a final reading of 49.7 in July.

Foreign sales increased at the fastest rate since September 2014, it said, as more non-U.S. markets reopened their economies.

The improvement in the PMI data comes even as U.S. coronavirus infections continue to climb, and some authorities in the hard-hit South and West regions this summer have been forced to either shut down businesses again or pause reopenings. As of Aug. 20, more than 5.5 million U.S. cases cumulatively had been recorded since the pandemic began, according to a Reuters tally, up from around 4.6 million at the end of July.

The unexpectedly sharp increases in Markit’s indexes continue a pattern of choppy U.S. economic data that paint a picture of a fitful recovery from the COVID-19 recession, with pockets of both strength and weakness dotted across disparate portions of the economy and regions.

On Thursday, for instance, the U.S. Labor Department reported that new claims for unemployment benefits shot back above the 1 million mark last week. Meanwhile, earlier in the week the government reported residential construction had accelerated by the most in nearly four years last month.

Markit’s services sector flash PMI increased to 54.8 from a reading of 50 in July. Economists polled by Reuters had forecast a reading of 51 for the services sector, which accounts for roughly two-thirds of the U.S. economy.

Factory activity climbed for a fourth straight month, with the flash manufacturing PMI increasing to 19-month high of 53.6 from a reading of 50.9 in July. Economists had forecast the index for the sector, which accounts for 11% of the economy, advancing to 51.9 in August. A measure of new orders received by factories climbed to a reading of 54.3 from 51.3 in July. Output also rose.

Reporting by Dan Burns, Editing by Chizu Nomiyama

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