Preliminary
data issued by S&P Global on Thursday revealed that U.S. private sector
business activity grew in early February, albeit at a slightly
weaker pace than in January, as a softer increase in the dominant services sector
offset a quicker expansion in manufacturing.
According to
the report, S&P Global flash U.S. Composite Purchasing Manager's Index
(PMI) Output Index came in at 51.4 early this month, down from 52.0 in January.
A reading above 50 signals an expansion in activity, while
a reading below this level signals a contraction
S&P Global
flash manufacturing PMI jumped to 51.5 in February from 50.7 in the previous
month. The latest print pointed to the strongest increase in operating
conditions at goods producers since September 2022. Economists had predicted
the manufacturing PMI to slip to 50.5.
Meanwhile, S&P
Global flash services PMI checked in at 51.3 in February, down from 52.5 in January. The latest reading indicated the weakest
expansion in activity across the sector in three months. Economists had forecast the services
PMI to drop to 52.0.
S&P Global
noted that new business demonstrated a marginal expansion midway through the
first quarter of 2024, though the pace was the second-fastest since July 2023 as
manufacturers and service providers recorded output growth. Manufacturing witnessed
a renewed increase in production amid an improvement in supply chains after
adverse weather in January, while service providers saw a loss of growth
momentum. Employment continued to rise but at the slowest rate in three
months as services staffing numbers registered a less marked gain amid cost
concerns and softer new order growth. On the price front, input prices rose at
the weakest pace since October 2020, while selling prices picked up slightly, and the rate of increase was the second-slowest since mid-2020.