U.S. private sector expands at slowest pace for six months
However, the latest reading was down from 54.1 in February and signalled the slowest expansion of private sector output since September 2016.
Softer business activity growth was driven by a loss of momentum in the service economy (‘flash’ index at 52.9, down from 53.8 in February).
Manufacturing production also expanded at a weaker pace in March (‘flash’ output index: 54.4, down from 55.6).
March data also revealed a slowdown in staff hiring by private sector companies.
The latest rise in payroll numbers was only marginal and the weakest for six months.
The composite index is based on original survey data from the Markit U.S. Services PMI and the Markit U.S. Manufacturing PMI.
At 52.9 in March, the Markit Flash U.S.
Services PMI Business Activity Index1 signalled only a moderate rate of growth across the service economy.
The latest expansion of business activity was the weakest since last September, suggesting a sustained loss of momentum following the 14- month peak recorded in January.
Survey respondents noted that a softer increase in new business had acted as a brake on growth in March.
Reflecting this, the latest rise in new work received by service providers was only modest and the weakest for 12 months.
Some firms commented on greater caution among clients, despite a supportive economic backdrop so far in 2017.
Staff hiring continued to ease from the 15-month peak recorded last December.
Moreover, the rate of service sector job creation in March was one of the weakest reported over the past three years.
The rate of prices charged inflation remained only modest in March, with some service providers commenting on the need to absorb higher costs.
Anecdotal evidence mainly pointed to rising food prices and transportation costs.
However, the overall pace of input cost inflation was relatively subdued and held close to the five-month low seen in February. ■