Growth in U.S. manufacturing output slowed to the second-lowest level in the past year as new orders and production expanded at the weakest pace in almost two years, according to the latest survey data from IHS Markit.
IHS Markit's U.S. flash composite purchasing managers index, or PMI, declined to a six-month low of 54.3 in March from 55.5 in the prior month, below the Econoday consensus forecast reading of 55.2. A reading above 50 indicates an overall monthly increase.
The U.S. flash manufacturing PMI fell to a 21-month low of 52.5 from February's 53.0, while the U.S. flash services business activity index came in at 54.8, down from 56.0 in February.
Weaker client demand in March weighed on new orders, which eased to the slowest pace in almost two years. Job growth slowed to its weakest level since June 2017 amid less favorable demand conditions and weaker new business growth.
Panelists noted a decline in optimism about the business outlook for the year ahead, marking the weakest rise since June 2016.
The service sector remained resilient, but weaker client demand and business optimism about the year-ahead outlook in the manufacturing sector could adversely affect services providers, according to Chris Williamson, chief business economist at IHS Markit.