The US Manufacturing Purchasing Managers Index (PMI) declined to its lowest level since October 2020, according to London-based global data provider IHS Markit on Monday.

The index, which measures the activity level of purchasing managers in the manufacturing sector, fell to 57.7 in December, down from 58.3 in the previous month. The flash estimate was 57.8.

“The improvement in the health of the US manufacturing sector was the slowest in 2021 amid subdued output and new order growth,” the firm said, adding: “Ongoing efforts to build safety stocks and a severe deterioration in vendor performance, ordinarily signs of improving conditions, continued to lift the headline PMI, however.”

It stressed that manufacturers noted further constraints on production due to severe material shortages and input delivery delays.

Sian Jones, a senior economist at IHS Markit, said: “Adding to the sector’s challenges was an ebb in client demand from the highs seen earlier in 2021, with new orders rising at the slowest pace for a year, largely linked to a reluctance at customers to place orders before inventories were worked through.”

Jones added that shortages continued to be important and “the end of the year brought with it some signs that cost pressures have eased.”

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