By Kimberly Chin 
 

A reading of private-sector manufacturing and services activity in the U.S. fell in March as manufacturing output growth slowed, according to a report released Friday.

A flash reading of the IHS Markit U.S. Manufacturing Purchasing Managers' Index fell to a seasonally-adjusted 52.5 in March, its lowest reading since June 2017. This was down from 53 in February.

Meanwhile, the U.S. Services Business Activity Index also fell to 54.8 in March, down from February's seven month high of 56.

Readings above 50 indicate expansion, while anything below 50 indicates contraction.

"A gap has opened up between the manufacturing and service sectors, however, with goods-producers and exporters struggling amid a deteriorating external environment and concerns regarding the impact of trade wars," said IHS Markit Chief Business Economist Chris Williamson in prepared remarks. "The survey is consistent with the official measure of manufacturing production falling at an increased rate in March and hence acting as a drag on the economy in the first quarter."

Manufacturers saw new orders, output and employment drag March's headline number, IHS Markit said. Survey respondents said the slowdown in client demand was cyclical.

Workers in the service-sector also saw a slower rise in new work. It was the smallest increase to employment totals since May 2017, the report said.

Write to Kimberly Chin at kimberly.chin@wsj.com

(END) Dow Jones Newswires

March 22, 2019 10:23 ET (14:23 GMT)