The U.S. manufacturing sector’s tentative recovery lost momentum in February, as concerns over impending tariffs prompted customers to adopt a cautious “wait-and-see” approach, according to the latest industry data.
Modest Growth Amid Persistent Challenges
The Institute for Supply Management’s (ISM) Purchasing Managers’ Index (PMI) registered 50.3% in February, marking the second consecutive month of expansion after 26 straight months of contraction. However, the reading declined from January and fell short of economist forecasts, signaling a fragile recovery.
Tariff Jitters Disrupt Supply Chains
Manufacturers cited growing anxiety over the Trump administration’s trade policies, including 25% tariffs on Canada and Mexico set to take effect imminently. Key concerns highlighted in the report include:
- Plunging new orders as buyers delayed spending decisions
- Accelerating input costs, with the prices paid index surging 7.5 points to 62.4%
- Supply chain disruptions, including delivery stoppages and inventory imbalances
“Tariff uncertainty has created hesitation across the production pipeline,” noted Timothy Fiore, Chair of ISM’s Manufacturing Business Survey Committee. The sentiment was echoed by Nationwide Senior Economist Ben Ayers, who observed that downstream consumers were deferring expenditures amid the policy ambiguity.
Broader Economic Implications
The softening PMI data contributed to waning market confidence Monday, reflecting heightened apprehensions about both manufacturing health and the broader economic impact of protectionist trade measures. While the sector remains in expansion territory, February’s deceleration underscores how policy-driven volatility could undermine its fragile rebound.
As manufacturers navigate rising costs and demand uncertainty, the sustainability of the recovery hinges on whether tariff tensions ease—or further disrupt an industry still struggling to regain its footing.
