US manufacturing growth stalls in Mar after strong Feb growth: PMI

Confidence in the outlook for business activity softened amid some uncertainty over the impact of federal government policies.

Employment numbers were unchanged after four months of job gains.

Softer trends in output and new orders, plus uncertainty in the outlook, weighed on hiring decisions.

Cost pressures intensified, largely due to the impact of tariffs, with input price inflation rising to its highest level in over two-and-a-half years.

At 50.2, the seasonally adjusted S&P Global US manufacturing purchasing managers’ index (PMI) remained just above the crucial 50 no-change mark for a third month in a row in March. It was 52.7 in February.

The PMI signaled a marginal improvement in operating conditions that was the weakest of the year so far, S&P Global Ratings said in a release.

A drop in production for the first time since December weighed heavily on the headline index, S&P Global Ratings aid in a release.

The modest fall in output was in stark contrast to the fastest rise in production for nearly three years seen during February and partly reflected fewer instances of output being raised to front-run tariffs.

Market uncertainty was also frequently reported in the United States, linked to concerns over tariff implementation and federal government policies. This served to weigh on new order book growth, which was modest overall in March and the lowest of the year so far.

Orders were reported to have increased from clients based in Asia, Canada and Europe during March.

Confidence in the outlook softened again in February, dropping for a second successive month to its lowest level since December.

US employment was unchanged in March, following a four-month run of growth. Sluggish demand growth and elevated costs weighed on hiring activity, anecdotal evidence suggests.

Capacity nonetheless remained sufficiently high to comfortably deal with overall workloads. Levels of work outstanding declined in March at the fastest rate since December, to thereby extend the current period of contraction to two-and-a-half years.

Against a backdrop of falling output and slower order book growth, manufacturers signaled a modest cut in purchasing activity. Instead, firms preferred to utilise existing inputs in production wherever possible, recording a drop in stocks of inputs following marginal growth in February.

Overall, input price inflation spiked higher in March, hitting its highest level since August 2022. The steep increase in input prices fed through to a greater rise in manufacturing selling prices during March.

Output price inflation picked up for a fourth successive month to a 25-month high during the month.

ALCHEMPro News Desk (DS)