Preliminary data released by IHS Markit on Friday revealed that U.S. private sector business activity recorded its strongest monthly expansion for almost six years in February.

According to the report, the Markit flash manufacturing purchasing manager's index (PMI) came in at 58.5 in January, down slightly from 59.2 in January. Economists had expected the reading to drop to 58.5. A reading above 50 signals an expansion in activity, while a reading below this level signals a contraction. The headline index reading was buoyed in part due to a substantial deterioration in vendor performance. Expansions in production and new orders weakened, but the rates of growth were still steep overall, supported by strong client demand. In addition, the rate of job creation was the quickest since December 2017.

The Markit flash services purchasing manager's index (PMI) rose to 58.9 in February, up from 58.3 in the previous month. The rate of expansion was the steepest since March 2015, as service sector firms saw greater client demand. Economists had expected the reading to decrease to 57.6. The new business rose at the sharpest pace for three months, despite a decrease in new export orders, while employment rose only marginally amid efforts to control outgoings.

Overall, IHS Markit Flash U.S. Composite PMI Output Index came in at 58.8 in February, up slightly from 58.7 in January, indicating the sharpest expansion since March 2015.

Chris Williamson, Chief Business Economist at HIS Markit noted: “Despite headwinds of COVID-19, extreme weather and record supply chain delays, US businesses reported the fastest output growth for almost six years in February. The data add to signs that the economy is enjoying a strong opening quarter to 2021, buoyed by additional stimulus and the partial reopening of the economy as virus-related restrictions were eased on average across the country."