U.S. business activity growth eases to 31-month low in March

Preliminary data released by IHS Markit indicated that the U.S. private sector growth in March expanded at the weakest pace since September 2016.

According to the report, the Markit flash manufacturing purchasing manager's index (PMI) stood at 52.4 in April, unchanged from March’s reading. 

Economists had expected the reading to increase to at 52.8. 

A reading above 50 signals an expansion in activity, while a reading below this level signals a contraction. 

According to the report, improved readings for output and new orders were offset by slower increases in employment and pre-production inventories.

Meanwhile, the Markit flash services purchasing manager's index (PMI) decreased to 52.9 this month, down from 55.3 in the prior month. The reading indicated the slowest increase is the services sector since March 2017, as new business softened to a 2-year low.

Economists had expected the reading to decrease to 55. 

Overall, IHS Markit Flash U.S. Composite PMI Output Index came in at 52.8 in April, down from 54.6 in the previous month, pointing to the slowest increase in overall business activity since September 2016. 

Commenting on the flash PMI data, Chris Williamson, Chief Business Economist at IHS Markit noted, “The US economy started the second quarter with its weakest expansion since mid-2016 as businesses reported a marked slowing in output, new orders and hiring. The survey indicates that the manufacturing downturn seen in the first quarter has persisted into April, but growth in the service sector has now also slumped to a two-year low as the malaise showed further signs of spreading beyond the factory sector.”