- 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.
