Growth in US Business Activity Is Weakest Since 2023 on Tariffs
US business activity expanded at the slowest pace since 2023, while output expectations deteriorated and price pressures mounted as tariffs created headaches for companies.
The S&P Global flash April composite index of output at manufacturers and services providers dropped 2.3 points to 51.2, according to data released Wednesday. Figures above 50 indicate expansion. A gauge of future production slid 3.5 points to the lowest level since October 2022.
“Manufacturing is broadly stagnating as any beneficial effect of tariffs are offset by heightened economic uncertainty, supply chain concerns and falling exports, while the services economy is slowing amid weakened demand growth, notably in terms of exports such as travel and tourism,’’ Chris Williamson, chief business economist at S&P Global Market Intelligence, said in a statement.
Complicating matters is an acceleration in prices charged, with the composite gauge climbing to a more than one-year high. The pickup was attributed to tariffs, higher import prices and rising labor costs.
The group's prices paid index eased slightly but remained elevated compared with the past year. For manufacturers, input costs grew at the fastest pace since August 2022 as suppliers pushed through price hikes related to tariffs and the dollar weakened, the report showed.
“Tariffs are meanwhile being cited as the key cause of higher prices, though labor costs are also reportedly continuing to rise, causing companies to hike their selling prices at a pace not seen for over a year,” Williamson said.
Orders growth at manufacturers was slightly improved from the prior month, while a gauge of new business at service providers declined a point. A measure of new export business for services, however, showed the largest contraction since the start of 2023.
Data for the survey were collected April 9-22.
Source : Bloomberg
