- Key measures of US manufacturing activity in the US fell in February as a novel coronavirus spread outside of China to more than four dozen countries.
- The outbreak has disrupted global supply chains and raised broader concerns about global growth.
- “Coronavirus-related supply chain issues threaten to constrain production in coming months,” said Chris Williamson, the chief business economist at IHS Markit.
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Key measures of US manufacturing activity in the US fell in February as a novel coronavirus spread outside of China to more than four dozen countries, disrupting global supply chains and raising broader concerns about global growth.
The Institute for Supply Management said its manufacturing index slipped to 50.1, missing economists’ forecasts for a print of 50.5. A reading above 50 indicates expansion in the sector. In January, the gauge rose slightly above that level to 50.9 for the first time since July.
“Coronavirus continues to be front and centre as a major supply chain risk to our company. Access to information in China – from our supply base and customers – is slow to come by,” one respondent said in the ISM release.
Earlier Monday, a survey of businesses released by the data firm IHS Markit also found that factory activity fell in February. Its Purchasing Managers Index decreased to 50.7 from 51.9 a month earlier.
The respiratory illness COVID-19 has compounded issues for the manufacturing sector, which entered a technical recession last year as trade concerns and global growth concerns caused new orders and production to weaken sharply. Governments around the world have imposed travel and commerce restrictions in response to the outbreak, while the private sector has sent workers home and shuttered plants.
“While trade war fears have eased, helping push firms’ expectations for future growth to the highest since last April, coronavirus-related supply chain issues threaten to constrain production in coming months,” said Chris Williamson, the chief business economist at IHS Markit. “At the same time, companies have become increasingly concerned that the COVID-19 outbreak will also hit demand.”
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