Growth in the services sector fell in February to the lowest level since April 2025, according to data released Wednesday morning by S&P Global. The index reading was 51.7, compared to economists’ estimates of 52.3.
The slowdown in growth was driven by an uptick in poor weather, strong gains in operating expense, and confidence levels in the market that remain well below trend, adding to bearish feelings around US growth. New order growth “extended into a twenty-second successive month” but cooled from January, according to S&P.
“February’s PMI surveys reflect increasingly tough trading conditions for businesses so far this year,” Chris Williamson, chief business economist at S&P Global Market Intelligence, said.
“Slowing demand growth from customers both at home and across export markets has been compounded by adverse weather in many states, resulting in the smallest rise in service sector activity for ten months.”
Five out of seven market sectors notched an uptick in output, led by healthcare and industrials, according to S&P Global’s sector readings, with the basic materials and consumer goods sectors seeing the two losses in growth for the month.
Yet, even given widespread growth, “optimism about the year ahead remains subdued by concerns over government policies, and is especially low in the service sector, where the tariff impact is seen as broadly negative and where labor-intensive industries such as leisure and recreation continue to suffer from a combination of worker shortages, high costs and low consumer confidence,” Williamson said.
February marks the first time since September 2024 that healthcare has been the fastest-growing sector in the economy, according to S&P Global.