- 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.
