PMI manufacturing roughly in-line with forecast, ISM Manufacturing gauge edges lower in February

December data pointed to a further recovery in operating conditions across the U.S. manufacturing sector. The sustained improvement was supported by a solid rise in new business and a further upturn in production. Output expectations remained historically muted, however. 

Meanwhile, rates of both input price and output charge inflation quickened amid higher cost burdens and the ongoing impact of tariffs. The seasonally adjusted IHS Markit final U.S. Manufacturing Purchasing Managers’ Index™ (PMI™) posted 52.4 in December, down slightly from 52.6 in November and in line with the flash figure. The latest data indicated a modest improvement in the health of the U.S. manufacturing sector. The final quarterly average of 2019 was in fact the strongest since the opening three months of the year. 

Output growth across the sector softened from November's recent peak, but was moderate nonetheless. The expansion was linked to greater client demand and a rise in new order volumes. The rate of increase was still well below those seen at the end of 2018, however.New business received by manufacturing firms grew at a solid rate in December, and one that was the second-strongest since April. The sustained rise in client demand was partially attributed to the acquisition of new clients and reviving export sales. Goods producers reported a third consecutive upturn in new export orders.

On the price front, cost burdens rose at a solid pace at the end of the fourth quarter. The rate of input price inflation accelerated to a nine-month high as firms stated that higher supplier costs and tariffs had driven prices up.

 ...meanwhile...

Economic activity in the manufacturing sector grew in February, and the overall economy grew for the 130th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM^® Report On Business^®.

The report was issued today by Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management^® (ISM^®) Manufacturing Business Survey Committee: “The February PMI^® registered 50.1 percent, down 0.8 percentage point from the January reading of 50.9 percent. The New Orders Index registered 49.8 percent, a decrease of 2.2 percentage points from the January reading of 52 percent. The Production Index registered 50.3 percent, down 4 percentage points compared to the January reading of 54.3 percent. The Backlog of Orders Index registered 50.3 percent, an increase of 4.6 percentage points compared to the January reading of 45.7 percent. The Employment Index registered 46.9 percent, an increase of 0.3 percentage point from the January reading of 46.6 percent. The Supplier Deliveries Index registered 57.3 percent, up 4.4 percentage points from the January reading of 52.9 percent. The Inventories Index registered 46.5 percent, 2.3 percentage points lower than the January reading of 48.8 percent. The Prices Index registered 45.9 percent, down 7.4 percentage points as compared to the January reading of 53.3 percent. The New Export Orders Index registered 51.2 percent, a decrease of 2.1 percentage points as compared to the January reading of 53.3 percent. The Imports Index registered 42.6 percent, an 8.7-percentage point decrease from the January reading of 51.3 percent.