U.S. manufacturing growth at six-month low
The U.S. manufacturing sector saw a slowdown in growth for March 2017, to the lowest level since October 2016.
The latest Markit/CIPS U.S. Manufacturing Purchasing Managers’ Index figures were at 53.3 for March 2017, dropping from 54.2 in February. New orders are at their slowest for six months and input cost inflation has risen to the highest level for two and a half years.
David Johnson, director at currency specialists, Halo Financial, said:
“While business conditions in the U.S. manufacturing sector have got better throughout March, it does seem like the flurry of activity seen after the Presidential Election has calmed down, with a variety of pressures facing U.S. manufacturers.
“The latest figures show the weakest growth for half a year, directly affected by a number of key factors for industry growth: slowing output, fewer new orders, increasing cost pressures and slower employment growth.
“The rising costs of raw materials – particularly chemicals and metals – are increasing prices at the factory gate; and this is pushing output price inflation to its highest level for two and a half years. This, in turn, is affecting delivery lead times, which are also lengthening the most for over two years.
“Once again, we are seeing rising global costs and exchange rate volatility affect industry growth. This could persuade the Federal Reserve to be more inclined to support economic growth as the year continues; maybe keeping interest rates lower for longer than the markets currently forecast.”