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United States PMI March 2024

United States: Manufacturing sector PMI dips in March

The S&P Global U.S. Manufacturing Purchasing Managers’ Index (PMI) fell to 51.9 in March from 52.2 in February. As a result, the index remained above the 50.0 no-change threshold, but signaled a softer improvement in manufacturing sector operating conditions compared to the previous month.

Key drivers behind the latest PMI reading include a solid and accelerated rise in production, which was the sharpest in almost two years—primarily due to signs of improving demand conditions. Additionally, the rate of job creation quickened. Less positively, the pace of new orders growth ebbed, and firms continued to show a preference for drawing down inventories and scaling back purchasing activity.

On the pricing front, there were sharper rises in both input costs and output prices. This uptick in costs was attributed to higher oil and raw material prices, transport prices, and labor costs. Finally, businesses remained upbeat about the future, thanks to expectations for improved economic conditions ahead.

Chris Williamson, chief business economist at S&P Global Market Intelligence, said:

“The US economy looks to have expanded at a solid pace again in the first quarter. A key development in recent months has been the broadening-out of the upturn from services to manufacturing, with reviving demand for goods driving the fastest increase in factory production since May 2022. Jobs growth has also picked up as firms boost capacity to meet demand. Rising capex spending has likewise buoyed orders for machinery and equipment, in a further sign of firms gaining confidence in the outlook.”

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