U.S. manufacturing expanded at its fastest pace since mid-2022 in February, according to the latest S&P Global U.S. Manufacturing PMI, which rose to 52.7 from 51.2 in January.
The report signals an acceleration in the sector’s recovery, driven by stronger new orders and increased production. This marks two consecutive months of expansion, coinciding with Donald Trump’s return to the presidency.
A separate report from the Institute for Supply Management (ISM) offered a more cautious view, with its PMI slipping to 50.3 from 50.9 as new orders contracted and employment declined. However, ISM still confirmed expansion for a second month, breaking a 26-month contraction under Biden. ISM’s reading also fell short of economists’ expectations of 50.6, signaling a slower-than-expected recovery.
After years of stagnation, the U.S. manufacturing sector is showing renewed strength under President Trump’s leadership. The latest data signal a reversal from the prolonged contraction during Biden’s term. Businesses are responding to policy shifts aimed at strengthening domestic industry, securing supply chains, and encouraging investment.
S&P Global vs. ISM: A More Accurate Picture of U.S. Manufacturing?
The S&P Global PMI surveys a broader range of businesses, including small and mid-sized manufacturers that are often more sensitive to economic conditions. ISM’s survey skews toward larger firms, which may not fully capture the reality for smaller manufacturers.
Another key difference is global versus U.S.-focused data. S&P Global explicitly asks companies to report only on U.S. operations, while ISM does not impose this restriction, meaning some responses may reflect global conditions rather than purely domestic activity.
S&P Global’s PMI has also been historically more stable and better correlated with Federal Reserve manufacturing data, thanks to its larger sample size of over 1,300 firms versus ISM’s 600-700 respondents.
While ISM’s data is more volatile, both reports confirm overall manufacturing expansion—with S&P Global indicating a stronger and more sustained recovery.
Manufacturing Expansion, but Tariff Uncertainty Looms
While both reports show manufacturing growth, S&P Global suggests a more resilient sector as businesses increase production and frontload purchases ahead of expected tariffs.
At the same time, price pressures are mounting. The ISM Prices Index surged 7.5 points to 62.4, reflecting inflationary pressures in raw materials like steel and aluminum. S&P Global also reported the steepest rise in factory prices in two years, as suppliers pass higher costs onto manufacturers. The Fed’s rate cuts late last year may also have reignited inflation, with recent price reports from the Labor Department and Commerce Department showing a strengthening of inflationary pressures.
Despite concerns over rising costs, key industries—including petroleum, food, and chemicals—expanded in February, according to both reports. These industries have been a focus of the Trump administration’s economic agenda, contributing to domestic energy security and supply chain stability.
Additionally, growth in petroleum, food, and chemical production could help moderate consumer inflation, stabilizing prices in essential goods even as other manufacturing inputs become more expensive.
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