Renewed expansion in US business activity in March 2023: S&P Global

Manufacturers and service providers alike registered upturns in output, with service sector firms driving the increase.

At 49.3, the S&P Global flash US manufacturing PMI was up from 47.3 in February, and signalled a slight deterioration in operating conditions across the manufacturing sector during March.

The rate of decline in the health of the US manufacturing sector was the slowest in the current five-month sequence of deterioration amid a renewed rise in production and a softer fall in new orders, S&P Global said.

Output across the goods-producing sector increased for the first time since last October, and at the steepest rate for ten months. Companies noted that greater production stemmed from a less marked contraction in new sales.

Finally, output expectations regarding the next 12 months were buoyed by hopes of greater investment, increased marketing spending and boosts to client demand. The degree of confidence was below the series trend, however, and the lowest for three months, amid inflationary concerns and uncertainty about the outlook for demand.

The headline S&P Global flash US PMI composite output index registered 53.3 in March, up notably from 50.1 in February. The reading was the highest for almost a year, and signalled a solid expansion in private sector activity.

Goods producers recorded the first rise in production since October 2022, partially stemming from the greatest improvement in delivery times on record, while service providers indicated a notable acceleration in the increase in business activity, S&P Global said in a release.

New export orders contracted for the tenth successive month at the end of the first quarter, as foreign client demand conditions remained historically subdued. The pace of contraction was only marginal, however, and the softest seen over the past ten months.

On the price front, input costs faced by US businesses continued to rise at a historically elevated pace in March despite the rate of inflation softening to the second-slowest since October 2020.

Although raw material and supplier price hikes had eased, firms stated that greater wage bills pushed up cost burdens.

In contrast, the pace of selling price inflation quickened at the end of the first quarter. The rate of increase was the fastest for five months.

Fibre2Fashion News Desk (DS)