A major gauge of the health of US manufacturing registered its lowest score since June 2017 today as output slowed amid tensions in global trade.
The US manufacturing purchasing managers’ index (PMI) posted a score of 52.4 in March, showing only a moderate improvement in the health of the manufacturing sector, data released by IHS Markit showed today.
March’s score was down from 53 in February, however, and notably below the 2018 trend. A score of 50 shows stagnation.
Businesses stated that the slower increase in production was due to softer underlying client demand, with firms in particular pointing to global trade tensions and the ongoing impact of tariffs.
However, the rate of job creation remained solid while cost pressures eased due to falling inflation rates.
Business confidence also increased compared to February, although it was below the longer-term trend. The optimism was due to new product development and efforts to increase productivity, IHS Markit said.
New business growth eased in March, with total new orders expanding at the slowest rate since June 2017.
Chris Williamson, chief business economist at IHS Markit said: "A further deterioration in the manufacturing PMI suggests the factory sector is acting as an increasing drag on the US economy.”
“The March survey is consistent with production falling at a quarterly rate of 0.6% according to historical comparisons with official data,” he said.
However, he added: “Hiring remained encouragingly solid during the month and expectations of future output perked up, albeit still running below levels seen this time last year.”