FX.co ★ US Manufacturing Sector Contracts in March

The S&P Global US Manufacturing PMI experienced a decline, dropping to 49.8 in March 2025 from 52.7 in February, according to a preliminary report. This figure fell short of market predictions, which had forecasted a level of 51.8. The downturn in manufacturing output followed February's most significant increase in nearly three years, with factories indicating a decrease in output advances previously attributed to a rush ahead of tariff changes. New orders almost came to a standstill, and input purchasing in the manufacturing sector turned negative. Notably, export sales showed only a minimal decline, the smallest in nine months, as demand from Canada, Germany, and other EU nations increased, potentially in an effort to complete orders before new tariffs take effect. Employment figures decreased for the first time since the previous October, with businesses expressing concerns about payroll numbers and mounting expenses. Input cost inflation surged to a 31-month high, while selling prices experienced the most significant rise in 25 months. Despite these challenges, business sentiment remained robust, ranking among the highest levels observed over the past three years.