The Institute for Supply Management (ISM) has released its monthly Purchasing Managers Index (PMI) for February, and the story told is another positive one with the PMI at 60.8% — up from January’s reading of 59.1% and well above the reading of 50% that indicates the manufacturing economy is generally expanding. Below 50% indicates it is generally contracting.
A PMI above 50%, over a period of time, generally indicates an expansion of the overall economy. Therefore, the February PMI indicates growth for the 106th consecutive month in the overall economy, and indicates growth in the manufacturing sector for the 18th consecutive month.
“Comments from the panel reflect expanding business conditions, with new orders and production maintaining high levels of expansion; employment expanding at a faster rate to support production; order backlogs expanding at a faster rate; and export orders and imports continuing to grow faster in February,” said Timothy R. Fiore, CPSM, C.P.M., Chair of the ISM Manufacturing Business Survey Committee.
“Supplier deliveries continued to slow (improving) at a faster rate. Price increases occurred across most industry sectors. The Customers’ Inventories Index indicates levels remain too low. Capital expenditure lead times improved by five days while production material supplier lead times extended four days during the month of February,” he added.
The New Orders Index registered 64.2%, a decrease of 1.2 percentage points from the January reading of 65.4%. The Production Index registered 62%, a 2.5 percentage point decrease compared to the January reading of 64.5%.
The Employment Index registered 59.7%, an increase of 5.5 percentage points from the January reading of 54.2%. The Supplier Deliveries Index registered 61.1%, a 2 percentage point increase from the January reading of 59.1%.
The Inventories Index registered 56.7%, an increase of 4.4 percentage points from the January reading of 52.3%. The Prices Index registered 74.2% in February, a 1.5 percentage point increase from the January reading of 72.7%, indicating higher raw materials prices for the 24th consecutive month.
Of the 18 manufacturing industries, 15 reported growth in February, in the following orders: Printing & Related Support Activities; Primary Metals; Machinery; Computer & Electronic Products; Petroleum & Coal Products; Nonmetallic Mineral Products; Plastics & Rubber Products; Fabricated Metal Products; Chemical Products; Transportation Equipment; Textile Mills; Miscellaneous Manufacturing; Paper Products; Electrical Equipment, Appliances & Components; and Food, Beverage & Tobacco Products. Two industries reported contraction during the period: Apparel, Leather & Allied Products; and Furniture & Related Products.
Further commentary and the full report are available at this link.