According to S&P Global, the pace of decline in new orders has sharpened, as has production levels. In addition, companies have reduced their purchases and stocks.

US manufacturing activity worsened in December for the sixth consecutive month, with the S&P Global Purchasing Managers' Index (PMI) rising to 49.4 points from 49.7 previously, a move away from the "quasi-stabilisation" of the sector in November.

The agency said the pace of decline in new orders had sharpened, as had production levels. Companies also reduced their purchases and stocks.

Business confidence also declined as firms faced a "much sharper" rise in input costs, which translated into higher sales prices. On a more positive note, employment rose "modestly" for a second month.

"US factories have had a difficult end to 2024 and have lowered their optimism about growth for next year," said Chris Williamson, chief economist for S&P Global Market Intelligence's corporate division.

"Output fell at an even faster pace in December amid disappointing new orders. [...] Factories reported a subdued sales and enquiry environment, particularly for exports," he said.

Williamson said companies were anticipating that the second Trump administration would reduce regulation and taxes and increase demand for US products through tariffs.

However, these hopes have been tempered in December by concerns about the cost of inputs and interest rates that will not fall as much as was predicted a few months ago.