| Consensus | Consensus Range | Actual | Previous | |
| Composite Index | 49.9 | 48.6 | ||
| Manufacturing Index | 51.2 | 50.9 to 51.6 | 49.9 | 51.0 |
| Services Index | 48.7 | 48.6 to 49.5 | 49.6 | 47.9 |
Highlights
Businesses continued to struggle in February, and although the composite PMI increased to 49.9 from 49.1 in January, the preliminary results show the private sector economy in contraction.
Manufacturing fell to a three-month low of 49.9 in February, falling from 51.2 in January. Economists were expecting a better result, with the median of an Econoday survey of forecasts calling for 51.2. Services didn't fare any better. While managing to outperform the median forecast of 48.7, the February result of 49.6 shows the sector remains in contraction.
Firms have been unable to generate new business which declined for three consecutive months, with order intake slowing at the fastest pace since July. Export markets were also weak.
While manufacturers were able to increase their inventory levels, service providers said that they were stymied by cautious consumers and poor weather. After increasing hiring the previous two months, new plans to add staff were largely put on hold.
Once again, the outlook for the coming twelve months has improved and remains above its 2025 average. Businesses are expecting demand to pick up at home and from abroad.
There is no getting around the fact the economy is facing challenges and that businesses are having to adapt to a variety of challenges.
Market Consensus Before Announcement
Manufacturing PMI is seen at 51.2 in February flash versus 51.2 in January final. The services PMI is seen at 48.7 in February flash versus 48.4 in January final.
Definition
The flash Composite Purchasing Managers' Index (PMI) provides an early estimate of current private sector business activity by combining information obtained from surveys of around 1,000 manufacturing and service sector companies. The flash data are released around ten days ahead of the final report and are typically based upon around 85 percent of the full survey sample. Results covering a range of variables including manufacturing output, employment, new orders, backlogs and prices are synthesised into a single index which can range between zero and 100. A reading above (below) 50 signals rising (falling) activity versus the previous month and the closer to 100 (zero) the faster is activity growing (contracting). The report also contains flash estimates of the manufacturing and services PMIs. The data are produced by S&P Global.
Description
Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data such as the purchasing managers' manufacturing indexes, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures.