U.S. services, private sector growth accelerate in March: Markit

NEW YORK Wed Mar 26, 2014 9:57am EDT

Workers spread asphalt on a street in the Cow Hollow neighborhood in San Francisco, California June 2, 2010. REUTERS/Robert Galbraith

Workers spread asphalt on a street in the Cow Hollow neighborhood in San Francisco, California June 2, 2010.

Credit: Reuters/Robert Galbraith

NEW YORK (Reuters) - U.S. private sector economic activity growth accelerated in March at a faster clip than in February as the services sector picked up, even as business creation showed warning signs, an industry report showed on Wednesday.

Financial data firm Markit said its "flash" composite Purchasing Managers Index (PMI), a weighted average of its manufacturing and services indexes, hit 55.8 in March, up from 54.1 in February.

The preliminary reading on the services sector rose to 55.5 this month from February's 53.3, more than offsetting a decline in the growth rate in the manufacturing sector reported on Monday.

A reading above 50 signals expansion in economic activity.

Growth in new orders slowed in March to 54.6, the lowest since October, from 56.6 last month. In the services sector, new business hit its lowest since November 2012 at 53.9, from 56.0 in February.

"Service sector activity rebounded in March after a weather-torn February, but the survey is clearly flashing some warning lights as to whether the economy has lost some underlying momentum," said Chris Williamson, chief economist at Markit, in a press release.

Clouding the outlook for next week's payrolls report, the pace of growth in hiring was unchanged from February for both the services sector and the overall private sector, matching lows not seen since March 2013.

(Reporting by Rodrigo Campos; Editing by Meredith Mazzilli)

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