(Washington) The activity of the manufacturing industry in the United States continued to decline in March, for the fifth consecutive month, in proportions higher than expected, according to data published Monday by the professional federation ISM.
The index stood at 46.3%, against 47.7% a month earlier, according to the survey, plunging a little more below the 50% threshold, below which activity is contracting.
It also remains well below analysts’ expectations, which rather anticipated a very slight decline, to 47.5%, according to the consensus published by Briefing.com. It is also the lowest level recorded since May 2020, at the height of the pandemic.
The index “reflects the willingness of companies to reduce production in order to adapt to the demand of the first half of 2023 and to anticipate a recovery in growth in the second half”, said Timothy Fiore, the head of the investigation, quoted in the press release.
“The manufacturing sector is facing several headwinds, between slowing demand and rising borrowing costs. While the relocation of supply chains and investments in the productive apparatus should support activity, a further tightening of credit seems to be a more visible obstacle,” HFE chief economics officer Rubeela Farooqi said in a note. .
Inflation continued to slow in February in the United States, to 5% year on year against 5.4% the previous month, according to the PCE index, favored by the Fed.
Another measure of inflation, the CPI index, which benchmarks and on which pensions are indexed, also showed a slight slowdown, to 6% over one year, against 6.4% in January.
To cope with this price increase, the Fed raised its key rate, now between 4.75% and 5%, which increased the cost of credit for households and businesses. It could continue on this path, believing that inflation is not slowing fast enough.
