NEW EXPORT ORDERS
New export order growth picked up slightly during February. That said, the upturn was broadly in line with the series trend and marginal overall. A number of surveyed firms suggested that higher export sales stemmed from greater foreign client demand.
BACKLOGS OF WORK
The level of outstanding business continued to rise at U.S. manufacturing firms in February, extending the current sequence of backlog accumulation that began in August 2017. Greater amounts of work-in-hand were linked to a sustained rise in new orders. Nonetheless, the rate of accumulation was only fractional and the slowest in the aforementioned sequence, reportedly reflecting a softer upturn in new business.
STOCKS OF FINISHED GOODS
Post-production inventories were unchanged in February following two consecutive monthly falls in stock levels. Where a rise was reported, panellists suggested this was due to stockpiling activity to ensure the quick shipment of goods. However, others noted that the slowdown in new orders had led to greater usage of current inventories.
U.S. manufacturing firms continued to register a rise in employment in February, with workforce numbers increasing at a solid rate. The pace of job creation was also faster than the series trend, and commonly attributed to greater production requirements and the replacement of staff.
U.S. manufacturing firms registered a further increase in output charges in February. Higher factory gate prices were attributed to the pass-through of greater input costs to clients. The rate of charge inflation was solid and faster than the long-run series average. The was despite easing from that seen at the start of the year to the second-slowest since December 2017.
Input prices paid by manufacturers rose sharply in February, despite the rate of inflation easing to an 18-month low. Greater cost burdens reportedly stemmed from higher raw material prices, with a number of firms continuing to highlight the ongoing impact of tariffs. The pace of increase was, however, slower than the series trend.
SUPPLIERS’ DELIVERY TIMES
The seasonally adjusted Suppliers' Delivery Times Index signalled a further deterioration in vendor performance across the U.S. manufacturing sector in February. Longer lead times were attributed to capacity shortages at suppliers. Deliveries were delayed to a lesser extent compared to 2018 as a whole, but the rate of deterioration remained greater than the series trend.
QUANTITY OF PURCHASES
Purchasing activity across the U.S. goods-producing sector increased in February, albeit at a slightly softer pace. The still solid rise in input buying was linked to restocking and a rise in output. That said, the rate of growth was slower than those seen throughout the majority of 2018 and was the second-weakest expansion since September 2017.
STOCKS OF PURCHASES
As has been the case each month since June 2017, stocks of purchases at manufacturing firms increased in February. The rise in pre-production inventories was linked to efforts to clear backlogs and expectations of further growth in new business. Nonetheless, the increase was only fractional and the slowest in the current 21-month sequence of expansion.
U.S. manufacturers were generally upbeat in February, with around 33% of monitored firms expecting a rise in output over the coming 12 months. Anecdotal evidence suggested positive sentiment was linked to optimism surrounding future new business growth and investment in new product development. That said, the degree of confidence was below the series trend and the second-lowest since November 2016.
The intellectual property rights to the U.S. Manufacturing PMI™ provided herein are owned by or licensed to IHS Markit. Any unauthorised use, including but not limited to copying, distributing, transmitting or otherwise of any data appearing is not permitted without IHS Markit’s prior consent. IHS Markit shall not have any liability, duty or obligation for or relating to the content or information (“data”) contained herein, any errors, inaccuracies, omissions or delays in the data, or for any actions taken in reliance thereon. In no event shall IHS Markit be liable for any special, incidental, or consequential damages, arising out of the use of the data. Purchasing Managers' Index™ and PMI™ are either registered trade marks of Markit Economics Limited or licensed to Markit Economics Limited. IHS Markit is a registered trademark of IHS Markit Ltd and/or its affiliates.
Chris Williamson, +44-20-7260-2329
Chief Business Economist
Siân Jones, +44-1491-461-017
Joanna Vickers, +44-207-260-2234