US services activity picks up in March, but expectations deteriorate sharply
By Alexander Bueso
Date: Monday 24 Mar 2025
(Sharecast News) - Business activity in the US picked up in March, but not in manufacturing, according to the preliminary results of two closely followed surveys.
And businesses' outlook for the year ahead soured.
S&P Global's Composite Output Index strengthened from a reading of 51.6 for February to 53.5 in March - a three-month high.
The flash US services PMI Business Activity Index jumped from 51.0 to 54.3, but the manufacturing PMI fell from 52.7 to 49.8.
Furthermore, S&P said that business expectations for the year ahead dropped to their second-lowest level since October 2022 "as companies grew increasingly cautious about the economic outlook, often citing worries over customer demand and the impact of aspects of the new administration's policies."
Yet it was services where confidence deteriorated rapidly, while in manufacturing it remained near the best levels of the past three years.
The survey compiler said of the worsening expectations in services that it was "attributed to concerns over the adverse impact on demand for services and financial markets of federal spending cuts, tariffs and wider policy changes from the new administration."
S&P also described jobs growth as "subdued", adding that input price inflation "accelerated sharply", particularly in manufacturing.
The latter was often linked to the hit from tariff policies, although competition was said to have partially offset the impact on selling prices.
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