US mfr'g remains in recession but some green inventory rebuild shoots?/Construction spending on mfr'g facilities/Consumer sentiment

US manufacturing, along with most of its worldly peers, remained in contraction in February according to the 47.8 ISM print. That’s down from 49.1 in January and under the estimate of 49.5. October 2022 was the last time it had a 5 handle. New orders fell back below 50, down 3.3 pts m/o/m at 49.2. Backlogs were up by 1.6 pts but remaining below 50 at 46.3. No sign of inventory rebuilding as this component fell .9 pts to 45.3 and customer inventories were 45.8. Employment was weak, down 1.2 pts to just 45.9, the lowest since last July. Export orders were a bright spot, rebounding by 6.4 pts to 51.6. On this ISM said, “Panelists’ comments supported improvement in order activity from China and the European region.” Of note too, and maybe related to the Red Sea issues, Supplier Deliveries rose 1 pt to 50.1, the first time its back above 50 since September 2022 (higher reflects slower deliveries and vice versa). Prices paid were little changed, down .4 pts at 52.5 after last months nearly 8 pt increase. That’s the 2^nd highest print since last April.

Notwithstanding the headline dip, breadth did improve as 8 industries saw growth of the 18 surveyed vs 4 in the month before. Seven saw contraction vs 13 in January.

Also, there seemed to be some glass half full optimism in some of the respondent comments that maybe this manufacturing recession can end and see below for what S&P Global said on this too.

“Currently seeing increasing sales in our business. Most delivery dates are in the second quarter of 2024.” [Chemical Products]

“The first quarter will be slower due to some customer order changes, but we are expecting the rest of 2024 to be strong. We may increase our growth projections.” [Transportation Equipment]