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Economic Update – May 2022
- Meanwhile, new orders for manufactured goods pulled back 0.5% from a record $544.7 billion in January to $542.0 billion in February. These data were pulled lower by declines in sales for motor vehicles and nondefense aircraft. Excluding transportation equipment, manufacturing orders rose 0.4% to a record $459.2 billion in February.
- Despite lingering supply chain, workforce and pricing pressures, the manufacturing sector has proved quite resilient over the past year. New factory orders have soared 12.6% year-over-year, or 13.4% with transportation equipment excluded.
- Factory shipments increased 0.6% to $541.0 billion in February, an all-time high. On a year-to-date basis, factory shipments have risen 13.7%, a very strong figure.
- The P. Morgan Global Manufacturing PMI declined to 53.0 in March, the lowest reading since September 2020. Manufacturers continued to grapple with supply chain, inflationary and workforce challenges, and the most recent data also likely reflected rising uncertainties following the Russian invasion of Ukraine. The index for future output also weakened to an 18-month low, although it continued to signal strong growth in production over the next six months
- Eight of the top 10 export markets had expanding manufacturing sectors in March, the same pace as in February. Brazil’s manufacturers reported the first growth in activity since October. Only four markets had improved PMI readings in March relative to January: Brazil, Canada and a still-struggling Mexico in the Americas and Japan. Europe and Asia (except Japan) reported weaker data. The S&P Global US Manufacturing PMI also strengthened in March, notching the strongest expansion in activity in six months.
- The S. trade deficit inched down from a record $89.23 billion in January to $89.19 billion in February. The data continued to be skewed by supply chain disruptions, the chip shortage and higher costs for petroleum. The goods trade deficit pulled back from an all-time high, down from $108.60 billion to $107.47 billion.
- Manufacturers in the United States continue to work robustly with the administration and Congress to open markets, enforce trade agreements and address trade challenges overseas to ensure trade certainty and competitiveness. Specific actions and priorities include the following:
- Urging an ambitious, inclusive approach on priorities such as market access, digital trade and good regulatory practices in the U.S.-proposed Indo-Pacific Economic Framework
- Advocating for key trade priorities such as the passage of the Miscellaneous Tariff Bill and a robust Section 301 tariff exclusion process as Congress works toward final China competitiveness legislation
- Pressing for stronger enforcement of Mexico’s trade commitments under the U.S.–Mexico–Canada Agreement, including problematic energy policies and actions
- Promoting stronger U.S. trade and economic engagement with the U.K. and other allies at inaugural U.S./U.K. trade dialogues
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