- Services reading the lowest since April 2025
- Prior was 51.2
- Manufacturing 52.4 vs 51.3expected
- Prior manufacturing was 52.2
- Composite 51.4 vs 52.3 prior
- Employment fell for the first time in over a year
- Companies’ expectations for output in the year ahead
deteriorated slightly in March - Slower growth and falling orders,
especially in terms of exports, were commonly blamed on
subdued confidence among both consumer and business - Prices paid for inputs meanwhile spiked higher
Chris Williamson, Chief Business Economist at S&P
Global Market Intelligence:
“The flash PMI survey data for March signal an
unwelcome combination of slower growth and rising
inflation following the outbreak of war in the Middle
East. Companies are reporting a hit to demand from the
additional uncertainty and cost of living impact generated
by the conflict. Travel, transport and tourism related
issues are compounded by financial market jitters and
affordability constraints, notably including concern over
the impact of higher interest rates, surging energy prices
and supply chain delays.
“Companies are meanwhile building safety stocks amid
concerns that the war may lead to more protracted
supply issues and price rises while trimming headcounts
to reduce overheads.
“The PMI data are indicative of GDP rising at an
annualized rate of just 1.0%, with a modest 1.3%
expansion signalled for the first quarter as a whole. The
survey’s price gauges meanwhile point to consumer
price inflation accelerating back to around 4%, hinting
at a growing risk of the US moving into an environment of
stagflation.
“The Fed will therefore need juggle these intensifying
upside risks to inflation against the growing risk of the
economy losing growth momentum, with much depending
on the duration of the war and its impact on energy prices
and global supply chains.”
This is one of the earliest indications since the war and there isn’t a big shift in manufacturing or services, which is a positive sign for the economy.
This article was written by Adam Button at investinglive.com.
