US S&P Global Feb. manufacturing PMI at 51.6 vs 52.4 prior

US S&P Global Feb. manufacturing PMI at 51.6 vs 52.4 prior

U.S. Manufacturing PMI Slows to Seven-Month Low in February

The U.S. manufacturing sector expanded in February but at its weakest pace in seven months, with the S&P Global Manufacturing PMI falling to 51.2 from 52.4 in January, below the consensus forecast of 52.6. This marks the seventh consecutive month of growth but signals a notable deceleration in activity. Factory output growth reached its lowest level since July 2025, while new orders declined for the second time in three months, reflecting softer domestic and export demand.

Employment growth in manufacturing nearly stalled, recording the smallest rise since July 2025 as firms adopted a more cautious approach to hiring. Inventories of purchased inputs fell at the fastest pace in 13 months, underscoring reduced production needs and lingering supply constraints. Meanwhile, supplier delivery times lengthened to the highest level since October 2022, driven by delays, shortages, and adverse weather.

The broader economy also showed signs of cooling. The S&P Global Composite PMI, which tracks manufacturing and services activity, dropped to 52.3 in February—the lowest since April 2025 from 53.0 in January. The services sector PMI similarly declined to 52.3, below expectations, as new business growth slowed.

Chris Williamson, chief business economist at S&P Global Market Intelligence, noted that the data suggests first-quarter GDP growth of approximately 1.5%, a marked slowdown compared to the robust expansion seen in late 2025. This aligns with the Commerce Department's earlier report of weaker-than-expected fourth-quarter GDP growth, partly due to disruptions from a government shutdown and moderating consumer spending.

While manufacturing activity remains in expansionary territory, the latest readings highlight growing caution among businesses amid persistent trade uncertainties, geopolitical risks, and inflationary pressures. Investors will likely monitor upcoming data for further signals on the trajectory of economic growth.