Input Stories

In January, U.S. manufacturing returned to growth for the first time in seven months. The S&P Global U.S. Manufacturing PMI rose to 51.2 in January from 49.4 in December, above the 50 threshold that indicates expansion in the sector. Meanwhile, the expansion was paired with a surge in optimism, with the year-ahead outlook for production hitting a 34-month high.

After the rate of decline in new orders increased sharply in December, growth in new orders in January was a prominent factor in the renewed strength in manufacturing conditions. Production levels rose for the first time in six months, with respondents linking the expansion in production schedules to the start of the new administration. On the other hand, new export orders continued to decline but to a lesser extent than the month prior.

In addition, business confidence jumped sharply in January, which led to increased employment levels for the third consecutive month.

Although respondents felt more optimistic about the pro-business approach of the incoming administration, firms remained worried about inflation as input costs continued to increase sharply. As a result, manufacturers were prompted to increase their output prices again to the highest pace since March 2024. Meanwhile, suppliers’ delivery times lengthened for the fourth consecutive month, due to staff shortages and extreme weather conditions.