The latest Chicago PMI figure came in at 47.6 for March, marking the 16th straight month of contraction. While any reading below 50 signals a shrinking manufacturing sector, the number actually beat expectations. Analysts were forecasting a far worse 45.2, so the slight uptick from the previous month’s 45.5 may look like a glimmer of hope. But let’s not kid ourselves: the recovery is still a long way off.
The manufacturing sector has been in a tailspin for over a year now, and this month’s reading only adds to the growing list of indicators suggesting a struggling economy. The fact that the PMI hasn’t hit the expansion mark (50) in over a year speaks volumes about the ongoing headwinds businesses face. While the uptick is a positive, it’s more of a pause than a sign of recovery. Resilience can only go so far before the cracks in the system widen further.
Sources:
https://www.xtb.com/en/market-analysis/breaking-us-chicago-pmi-reading-higher-than-expected