The US manufacturing sector improved in February, and the pace of improvement was the fastest since July 2022, according to the S&P Global US Manufacturing PMI released today.

The index rose to a reading of 52.2 in February from 50.7 in January.

“Manufacturing is showing encouraging signs of pulling out of the malaise that has dogged the goods-producing sector over much of the past two years,” Chris Williamson, chief business economist at S&P Global Market Intelligence, said in a press release.

“After a long spell of reducing inventories in order to cut costs, factories are now increasingly rebuilding warehouse stock levels, driving up demand for inputs and pushing production higher at a pace not seen since early 2022,” Williamson said. “There are also signs of stronger demand for consumer goods, linked in part to signs of the cost-of-living crisis easing.”

The rate of job creation in manufacturing also improved at the quickest pace since September, according to the S&P report.

“Firms are consequently investing in more staff and more equipment, laying the foundations of further production gains in the coming months to hopefully drive a stronger and more sustainable recovery of the manufacturing economy,” Williamson said.

“Problems with shipping disruptions and supply chains earlier in the year have eased, taking some pressure off input prices, though factory gate prices are recovering amid stronger customer demand, which will be an area to watch closely in the coming months as policymakers assess the appropriateness and timing of any interest rate cuts,” he said.