Input Stories

In February, U.S. manufacturing growth accelerated notably. The S&P Global U.S. Manufacturing PMI rose to 52.7 in February from 51.2 in January, the second consecutive month in expansion territory and the highest rate of growth since June 2022. Production improved to the quickest pace since May 2022, while new orders grew at the fastest rate in a year. Nevertheless, there’s evidence that the expansion for these components was partially due to advanced purchases ahead of price increases and potential supply chain disruptions once tariffs are imposed. Furthermore, the sector’s growth in February was coupled with a drop in optimism, as companies expressed concerns over tariffs and other administration policies.

Input costs increased in February to the highest level since November 2022, as suppliers started adjusting prices in response to tariffs. Faced with heightened input costs, output charges rose for the fourth consecutive month and at a steeper degree to the highest level in two years.

The growth in new orders was led by increased client restocking, as customers try to get ahead of tariffs. Global demand continued to drag on the overall orders reading, with new export sales dropping in February for the ninth consecutive month. Backlogs declined for a 29th consecutive month and at a faster rate, enabled in part by increased labor capacity. Meanwhile, February marks the fourth consecutive rise in the employment reading, but growth was modest.