Saturday, March 2, 2024

US manufacturing sector steeply declines in Feb: S&P Global

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The US manufacturing sector steeply declined in February this year, according to S&P Global’s purchasing managers’ index (PMI) surveys. A lack of new orders suggest that production could deteriorate further in the coming months as factories deplete their pipelines of previously placed orders, backlogs of which accumulated during the pandemic amid supply shortages, which are now easing.

A further shift toward inventory reduction is meanwhile adding to the US industrial sector’s drag on the wider economy.

Though the S&P global manufacturing PMI rose slightly to a three-month high of 47.3 in February from 46.9 in January, it continues to signal one of the steepest downturns outside of pandemic lockdown months since 2009, the company said in a release.

The US manufacturing sector steeply declined in February this year, according to S&P Global’s PMI surveys. A lack of new orders suggest that production could deteriorate further in the coming months as factories deplete their pipelines of previously placed orders, backlogs of which accumulated during the pandemic amid supply shortages, which are now easing.

The worry is that new order inflows continue to fall sharply as many companies across the United States report disappointing sales, linked in part to a sustained trend towards cost-saving inventory reduction and low levels of confidence at their customers, both at home and abroad.

With concerns over supply scarcities easing and lower production volumes necessitating fewer inputs, the amount of goods bought by factories fell for a seventh successive month in February. Although the rate of decline moderated, it was still among the steepest seen since the global financial crisis in 2009.

None of this points to a healthy economic situation. The clear message is that, unless demand growth accelerates, firms will eventually run out of previously placed orders and have to cut production and inventories further, adding to the industrial sector’s drag on the economy, S&P Global cautioned.

Fibre2Fashion News Desk (DS)


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