03-Feb-2026 06:52

A solid and stronger improvement in US manufacturing sector operating conditions was signaled by January's S&P Global PMI data amid the joint-sharpest upturn in production since May 2022. However, growth was in part driven by inventory building as new orders, despite returning to expansion in January, increased only modestly. Tariffs remained a notable theme from the latest survey, driving up input costs to a greater degree and limiting demand gains, especially from international markets.

Confidence in the outlook nonetheless held up well, remaining unchanged and only fractionally below its long term trend level in January. Some firms are hopeful that lower interest rates and reduced import competition will help support growth. Expectations of higher output and increased present operational requirements subsequently led to a modest rise in employment.

The headline index from the report, the seasonally adjusted S&P Global US Manufacturing Purchasing Managers' Index (PMI), recorded 52.4 in January. That was up from 51.8 in the previous month and therefore signaled a stronger rate of expansion in the manufacturing economy that was broadly in line with the survey average.

The upturn in the PMI emanated in part from a renewed rise in new orders, although growth was modest and below the survey average. Exports remained a source of demand weakness, falling overall for the seventh month in a row. Tariffs and ongoing trade uncertainties were reported to have weighed on sales, especially to South American and European clients.

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