U.S. business activity advanced to an eight-month high in early March as fewer Covid-19 restrictions and less severe supply chain disruptions supported demand and production.
The S&P Global flash U.S. composite purchasing managers index, formerly known as the IHS Markit PMI, increased 2.6 points to 58.5, the group reported Thursday. Readings above 50 indicate growth. IHS Markit recently merged with S&P Global.
The report also showed a measure of input prices accelerated to a near-record 76.8, further fanning inflationary pressures. Selling price inflation eased slightly in the month, though remains elevated.
“The pace of U.S. economic growth accelerated sharply in March as Covid-19 containment measures were relaxed to the lowest since the pandemic began, offsetting a drag from growing concerns about the Ukraine war,” Chris Williamson, chief business economist at S&P Global, said in a statement.
“However, a further upward lurch in costs, which were pushed ever higher by rising energy and other commodity prices, means inflation does not yet appear to have peaked,” he said.
The group’s manufacturing index rose to a six-month high in March, reflecting stronger growth in output, new orders and employment. Meantime, delivery times lengthened at the slowest rate since January 2021.
The gauge of services activity advanced to the strongest level since July, driven by a sharp increase in new business. While service providers expanded employment at the fastest rate since April 2021, strong demand continued to strain capacity.
Robust demand at both manufacturers and service providers helped drive the overall measure of backlogs to the highest in data back to 2009.
Looking ahead, businesses remain broadly upbeat on the outlook over the coming year, though the degree of confidence slipped to a five-month low amid concerns about rising costs and the Russia-Ukraine war. Service providers highlighted the potential impact of reduced disposable incomes on spending.
--With assistance from Chris Middleton.
This article was provided by Bloomberg News.