#manufacturing
“The V-Shaped US economic recovery continues to be led by manufacturing“– Paul Ebeling
Monday the IHS Markit and the Institute for Supply Management both released manufacturing activity data for February. Both of their reports showed the sector growing at the fastest pace in several yrs.
The ISM’s manufacturing PMI registered a reading of 60.8, the highest reading in 3 yrs and the fastest since the VirusCasedemic recovery began.
IHS Markit’s reading came in at 58.6, the 2nd-best reading for this index in the last 11 yrs, only January’s reading was better.
Readings over 50 for either index indicate expansion within the sector while readings below 50 indicate contraction.
And both readings say the same thing about the US manufacturing sector now, that is businesses cannot keep up with this recovery; notable pressures exist in both the pricing and delivering of goods now.
The ISM’s prices index surged to 86 last month, the highest level since June 2008, while the backlog of orders index hit its highest level in 17 yrs. The ISM’s supplier deliveries index also hit 72, a reading topped only by a 76 in April 2020 that served as a multi-decade high.
IHS Markit’s report indicated the longest increase for delivery wait times on record while input prices rose at the fastest rate since Y 2011.
Taken together, these numbers make very clear that manufacturers in the US broadly face higher costs while unfilled orders pile up and components to make finished products remain delayed.
This circumstance suggest an inflationary environment is here, and a very strong recovery is ready to happen if supply disruptions abate.
The data suggests that the US manufacturing sector is almost fully recovering the output lost to the VirusCasedemic last yr.
Have a healthy day, Keep the Faith!
