Preliminary
data released by S&P Global on Thursday revealed that U.S. private sector
business activity continued to expand in early March, albeit at a slightly softer pace than in February, as a weaker
rise in services activity offset a faster increase in manufacturing production.
According to
the report, S&P Global flash U.S. Composite Purchasing Manager's Index
(PMI) Output Index came in at 52.2 early this month, slightly down from 52.5 in
February. The latest reading continued to indicate a solid improvement in
business activity at the U.S. companies.
A reading above 50 signals an expansion in activity, while
a reading below this level signals a contraction.
S&P Global
flash manufacturing PMI rose to 52.5 in March from 52.2 in the previous month.
The latest print pointed to the strongest increase in operating conditions at
goods producers since June 2022 (52.7). Economists had forecast the manufacturing
PMI to drop to 51.7.
Meanwhile, S&P
Global flash services PMI checked in at 51.7 in March, down from 52.3 in February. The latest reading indicated the softest
growth in activity across the sector in three months. Economists had expected the services PMI to decrease to 52.0.
S&P Global
noted that business activity in the U.S. continued to increase solidly at the
end of the first quarter of 2024, though growth slowed from that seen in the
previous survey period. In March, new orders rose at a slightly softer pace
than in February, while the rate of job creation edged up to the strongest level so far this year and business confidence jumped to the highest level since May
2022 amid signs of a pick-up in the broader U.S. economy. On the price front, the
rate of input cost inflation quickened to a six-month high, while the rate of output
price inflation was the sharpest in just under a year.