- Prelim was 51.3
- Prior was 52.0
- Composite index 52.5 vs 51.4 prelim
- Prior composite index 52.0
- New business inflows have now risen for four
straight months - The rate of input cost inflation eased
again to the slowest since October 2020 - Business confidence dropped to the lowest
since last November - Growth in total sales was led by domestic demand, as foreign
customer interest dwindled and drove a renewed fall in new
export orders in February
This sets the stage for the ISM services number at the top of the hour. The commentary in this report is positive.
Chris Williamson, Chief Business Economist at S&P
Global Market Intelligence, said:
“A further robust expansion of service sector activity in
February follows news of faster manufacturing output
growth. The goods and services producing sectors are
collectively reporting the sharpest growth since last
June, hinting at a further quarter of solid GDP growth.
“The acceleration occurred despite a cooling of growth
in financial services, linked to the recent pull-back in
rate cut expectations. Demand for consumer goods and
services has, however, picked up further in February
amid the easing of the cost of living crisis and healthy
labor market conditions, meaning consumers are once
again at the forefront of the economic expansion.
“A concern is that alongside this faster growth, the
survey has seen price pressures revive. Although average
prices are still rising at one of the slowest rates seen
over the past four years, the rate of inflation picked up
for goods and services alike in February to hint at some
broad-based firming of price pressures that could worry
policymakers about cutting interest rates too early.”
So input prices are falling but output prices are rising? That’s good for margins but I wonder how sustainable it is. The differences in domestic/foreign demand also highlight the case for USD strength.