The S&P Global Flash U.S. PMI Composite Output Index fell to 52.3 in February from 53.0 in January. While any reading above 50 signals growth, February marked the weakest expansion since last April. Growth slowed in both manufacturing and services as new orders softened and export sales declined. Companies cited high prices, tariffs, stretched customer budgets and extreme winter weather as key challenges.

Employment increased only slightly for the third straight month, as businesses remained cautious about weak demand and rising costs. Supplier delivery times lengthened sharply, partly due to weather disruptions and tariff-related delays, pushing input inventories lower.

Cost pressures remained strong. Average input prices rose again, driven by supplier price hikes, tariffs and higher wages. Companies passed many of these costs on to customers, leading to the fastest rise in selling prices since last August. Services inflation picked up, while manufacturing price growth eased slightly.

The U.S. Manufacturing PMI fell to 51.2 from 52.4, signaling continued but weaker factory growth.

Despite the slowdown, business confidence about the year ahead improved to a 13-month high.