Preliminary
data released by S&P Global on Monday revealed that expansion in the U.S.
private sector business activity picked up momentum in early March as a marked
upturn in the service sector activity offset a renewed contraction in manufacturing
production.
According to
the report, S&P Global flash U.S. Composite Purchasing Manager's Index (PMI)
Output Index came in at 53.5 early this month, up from 51.6 in February. The latest reading signalled the quickest growth in business
activity since December 2024.
A reading above
50 signals an expansion in activity, while a reading below this level signals a
shrinkage.
S&P Global
flash services PMI checked in at 54.3 in March, strongly up from 51.0 in February.
This pointed to the strongest growth in activity across the services sector so
far this year. Economists had predicted
the services PMI to slip to 50.8.
Meanwhile, S&P
Global flash manufacturing PMI fell to 49.8 in March from 52.7 in the previous
month. The latest print indicated the first deterioration in business
conditions within the goods-producing sector since December 2024. Economists had forecast the manufacturing
PMI to decrease to 51.8.
S&P Global
noted that the March uptick in the U.S. business activity was concentrated in
the service sector, were businesses picked up after adverse weather conditions
had dampened activity across many states in January and February, which could
prove a temporary bounce. Meanwhile, manufacturing fell back into decline after
the front-running of tariffs had temporarily boosted factory output in the
first two months of the year. Employment returned to growth after a small
decline in February, led by renewed hiring in the service sector. On the price
front, the input cost inflation rate surged to the highest level in 23 months, while the selling
price inflation rate also demonstrated a modest acceleration, albeit to a level
that was historically subdued.