American business expansion hit its weakest pace in 10 months during February, with factory orders declining and service companies seeing reduced new business growth, according to survey data released Friday.
The S&P Global flash Composite PMI Output Index, which measures activity across manufacturing and service industries, dropped to 52.3 this month from January’s reading of 53.0. This marks the lowest level since April, though any figure above 50 still signals private sector growth. Both industry sectors saw their flash PMI readings decline during the month.
Chris Williamson, chief business economist at S&P Global Market Intelligence, warned of significant economic cooling ahead. “The PMI data so far this year are indicative of GDP rising at an annualized rate of just 1.5%, signalling a marked cooling of the economy in the first quarter compared to the robust growth rates seen in the second half of last year,” Williamson stated.
The Commerce Department also reported Friday that fourth-quarter gross domestic product growth fell short of expectations, hampered by last year’s government shutdown disruptions and weakened consumer spending patterns. The service sector index fell to 52.3 from January’s 52.7, missing economists’ projected 53.0 reading. Manufacturing activity dropped to a seven-month low of 51.2, down from last month’s 52.4 and below the anticipated 52.6. Factory new orders decreased for the second time in three months. Job creation across both sectors nearly stalled, registering just 50.2.
