PMI, New Orders, Production, Employment All Inch Up
Economic activity in the manufacturing sector expanded in February for the 19th consecutive month as the PMI reached 61.4 percent, the highest level since May 2004, according to the latest Manufacturing Report On Business from the Institute for Supply Management, Tempe, Ariz.
“New orders and production, driven by strength in exports in particular, continue to drive the composite index. New orders are growing significantly faster than inventories, and the Customers' Inventories Index indicates supply chain inventories will require continuing replenishment,” says Norbert J. Ore, chairman of ISM’s Manufacturing Business Survey Committee.
Of the 18 manufacturing industries, 14 reported growth in February, including fabricated metal products and miscellaneous manufacturing. Primary metals was one of the four industries reporting contraction in February.
Manufacturing continued its rapid growth, as the PMI of 61.4 percent was up 0.6 percentage point when compared to January's reading of 60.8 percent. A reading above 50 percent indicates that the manufacturing economy is generally expanding.
The New Orders Index registered 68 percent in February, which is an increase of 0.2 percentage point—the 20th consecutive month of growth in the index.
ISM's Production Index registered 66.3 percent in February, which is an increase of 2.8 percentage points from the January reading of 63.5 percent. An index above 51 percent, over time, is generally consistent with an increase in the Federal Reserve Board's Industrial Production figures.
The Employment Index registered 64.5 percent in February, 2.8 percentage points higher than the 61.7 percent reported in January. This is the 17th consecutive month of growth in manufacturing employment. It is also only the third time in the last 10 years the figure has been above 60 percent.