Preliminary data released by IHS Markit indicated that the U.S. private sector growth in March expanded at the weakest pace since September 2018.

According to the report, the Markit flash manufacturing purchasing manager's index (PMI) fell to 52.5 this month from 53 in February, pointing to the lowest expansion in factory activity since June of 2017.

Economists had expected the reading to increase to at 53.6. 

A reading above 50 signals an expansion in activity, while a reading below this level signals a contraction. 

Softer rises in output, new orders and employment all weighed on the headline PMI in March, the survey said. The latest expansion of production volumes was only modest and the least marked since June 2016.

Meanwhile, the Markit flash services purchasing manager's index (PMI) decreased to 54.8 this month, down from 56.0 in the prior month. 

Economists had expected the reading to remain at 56. 

The survey pointed to a softer rise in new work received by service providers and the smallest increase in employment numbers since May 2017.

Overall, IHS Markit Flash U.S. Composite PMI Output Index came in at 54.3 in March, down from 55.5 in the previous month, pointing to the weakest upturn in private sector business activity since September 2018.

Commenting on the flash PMI data, Chris Williamson, Chief Business Economist at IHS Markit noted, “US businesses reported a softer end to the first quarter, with output growth easing to the second lowest recorded over the last year. The PMI survey data nevertheless remain encouragingly resilient, indicative of the economy growing at an annualized rate in excess of 2% in the first quarter, suggesting some potential upside to many current growth forecasts.”