The US manufacturing sector may finally be climbing out of its recession.
US manufacturing has suffered for years but was hit the most since mid-2014 when oil prices began to collapse and the US dollar strengthened.
With headwinds calming Goldman Sachs has offered some “near-term optimism” on US manufacturing.
Regional surveys on the state of factories in the Philadelphia, New York, Richmond, Kansas City, and Dallas Federal Reserve districts all showed marked improvement in March:
Goldman Analyst Elad Pashtan used that uptick in optimism to suggest that US manufacturing might finally be “turning a corner.”
The aggregate improvement in these regional Fed surveys, he observed, constituted the largest one-month jump on record.
Analysts say the upturn in such surveys is supported by other metrics including railcar volumes, trucking activity, and seaborne container traffic.
Goldman projects that the ISM Manufacturing Purchasing Managers Index will break above 50 in the March reading that’s due out on Friday. A level above fifty shows expansion in the market.
“Nevertheless any manufacturing recovery is likely to be fragile, as risks from slowing auto sales and further dollar appreciation may derail the recovery,” Pashtan cautioned.