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The US manufacturing sector returned to growth in April, according to the latest data from S&P Global on Monday.
The seasonally adjusted S&P Global US manufacturing purchasing managers’ index posted 50.2 in April, up from 49.2 in March and broadly in-line with the earlier flash estimate of 50.4.
The reading was the first in six months to post above the 50.0 no-change mark that separates growth from contraction. The print was also the highest since October.
A return in new order growth supported the renewed overall upturn in the manufacturing sector, S&P Global said, adding that the improvement in demand was limited mainly to the domestic market.
‘US manufacturing output has regained some encouraging momentum at the start of the second quarter, having stabilised in March after four months of decline,’ said Chris Williamson, chief business economist at S&P Global Market Intelligence.
‘While the upturn is in part linked to greatly improved supply chains, helping reduce backlogs of orders. April also saw a welcome upturn in new order inflows for the first time since last September. Although only modest, the rise in new orders hints at a tentative revival of demand, notably from consumers but there are also signs that fewer customers are deliberately winding down their inventory levels.
‘The brightening demand picture was accompanied of a lifting of business confidence about the outlook and increased hiring. The downside was a reigniting of inflationary pressures, with a stronger order book encouraging more firms to pass through higher costs to costumers,’ Williamson said.
The S&P Global US manufacturing PMI is complied by S&P Global from responses to questionnaires sent to purchasing managers in a panel of around 800 manufactures. Data was collected between April 12 and 25.
Separately on Monday, the Institute for Supply Management said that the US manufacturing sector remained in contraction during April.
The ISM manufacturing PMI registered 47.1% in April, up from 46.3% in March.
The reading was better than market expectations of 46.6%, according to FXStreet.
ISM said April’s print was the sixth consecutive month of contraction for the sector.
Timothy Fiore, chair of the ISM, said: ‘The US manufacturing sector contracted again; however, the manufacturing PMI improved compared to the previous month, indicating slower contraction. The April composite index reading reflects companies continuing to manage outputs to better match demand for the first half of 2023 and prepare for growth in the late summer/early fall period.’
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