Feb sees accelerated US manufacturing sector expansion: Report

Growth was underpinned by noticeable upturns in both production and new orders.

There was some evidence that sector expansion was partially driven by advanced purchases ahead of likely price increases and possible supply disruption related to further tariff impositions in the coming months.

There was also evidence that some suppliers were already adjusting their prices upwards in direct response to tariffs, with input cost inflation increasing to its highest level since November 2022.

Output charges also rose to a steeper degree, with inflation picking up to a two-year high in February.

The seasonally adjusted S&P Global US manufacturing PMI recorded 52.7 in February, up from 51.2 in January. It was the second successive month that the index has pointed to an improvement in the health of the manufacturing sector, with the rate of growth the best since June 2022.

The strengthening of the headline PMI in February stemmed principally from accelerated gains in both output and new orders, S&P Global Ratings said in a release.

New work rose to the greatest degree in a year, with firms pointing to stronger market demand for their goods in February. Growth was partially driven by client restocking, with customers reportedly keen to get ahead of higher prices and possible supply challenges should a wider range of goods be subject to tariffs.

International demand remained a noticeable drag, however, on overall order books, with new export sales dropping in February for the ninth month in a row and to the greatest degree since last November.

Production growth was the fastest since May 2022. Growth was driven by a combination of increased sales, plus the clearance of work outstanding.

Latest data showed that backlogs declined for a 29^th successive month and to a slightly faster degree than at the start of the year. Backlog clearance was in part enabled by an expansion of labour capacity.

February’s survey data indicated a fourth successive monthly rise in employment, although growth was modest, especially in relation to recent output and order book gains, and down since January.

Job creation was also linked to positive projections for growth in the year ahead.

Whilst lower than January’s near three-year high, confidence overall remained comfortably above its long-run trend.

Panelists are looking to improvements in the economic and geopolitical climates in the year ahead, which are seen as key in supporting growth in sales and production.

Overall, input price inflation was the steepest since November 2022. Increased supply-side challenges were also evident in February, with average lead times for the delivery of inputs worsening for a fifth month running, and to the greatest degree for nearly two-and-a-half years.

Stock and labour shortages at vendors were widely noted.

ALCHEMPro News Desk (DS)