Even With Downward Revision, S&P Services PMI>ISM

Today's final US March Services PMI saw a 1.2 point downward revision from 53.8 in the flash estimate. Since the pandemic, only one revision has been larger in absolute terms (1.6pp in Apr '21, to 64.7 from 63.1).

• No explanation given in the S&P Global release, and not clear it's banking turmoil related as the final survey ran Mar 10-29 with the flash (released Mar 24) likely capturing most of that. France saw a large downward Services PMI revision this morning as well, though that's likely to be strike/protest related.
• Interestingly, the ISM miss means that even with the S&P PMI revision, the latter exceeded the former (51.2) for the first time since mid-2021.
• A tentative conclusion is that the ISM's pullback could be due to relatively weaker performances by larger businesses, and/or the weakness in commodity prices is increasingly feeding through to activity. We wrote about the differences in methodology last year as the series increasingly diverged (PDF here):
  • The ISM PMI is likely to be resilient because it has a wider range of industries, of which some have benefited from higher commodity prices
  • The ISM may have a bias towards larger firms that are more insulated from cost pressures
  • The S&P Global index is a business activity (output) index alone vs ISM’s weighted approach