Prior 53.5Final Composite PMI 51.9 vs 51.9 prelimPrior 53.2
Key findings:
New business falls for first time since last September Output price inflation eases despite spike in cost pressures
Comment:
Phil Smith, Economics Associate Director at S&P Global Market Intelligence:
“The war in the Middle East has put the brakes on growth in the service sector. Higher prices at the fuel pumps and heightened levels of uncertainty have weighed on spending and caused business activity growth to slow sharply to its weakest for seven months in March.
“Inflows of new business have fallen for the first time since last September in a clear sign of the Middle East war’s immediate impact on demand, whilst a notable drop in business expectations underlines how higher energy prices, supply chain disruption and generally elevated levels of uncertainty are set to stifle growth in the year ahead.
“Despite sharply rising costs, service providers haven’t been able to push through greater price increases to customers, with the weaker demand environment leading to the slowest rate of services price inflation for three months in March. The lack of pricing power in the service sector is important from a monetary policy perspective, as it limits the amount of upward pressure on core inflation, a measure that the ECB will be closely watching when considering interest rate increases.”
This article was written by Giuseppe Dellamotta at investinglive.com.