- Gus Faucher, deputy chief economist at PNC Financial
US manufacturing activity continued to shrink in February for the fifth consecutive month, underscoring strong headwinds that the nation's assembly lines have recently faced. According to the Institute for Supply Management, the index of purchasing managers rose to 49.5 last month, compared with 48.2 in January. Even though, the figure represented the highest reading since September 2015, the gauge remained below the key 50-mark threshold, which indicates a contraction in manufacturing that accounts for 12% of the US economy. A strong Greenback, sluggish global demand and spending cuts by energy firms following a precipitous decline in crude oil prices had derailed the manufacturing sector. New orders sub-index stayed unchanged at 51.5 in February, while production sub-gauge climbed to 52.8, compared with January's 50.2. The employment sub-index also inched up to 48.5, compared with January's 45.9. At the same time, Markit's final PMI declined to 51.3 in February, down from 52.4 seen in January. Jobs growth slowed to a five-month low, while factory gate prices declined the most since June 2012.
A separate report showed construction firms boosted their spending by a robust 1.5% in January, to mark the biggest monthly increase since last May.
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