The Institute for Supply Management’s (ISM) manufacturing index rose in February for the first time in six months. However, manufacturing activity remained in contraction on the back of volatile demand and rising inflationary pressures.
| Key Point |
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Upper row: General Manufacturing Index, Lower row: Purchase price index
Source: ISM
Activity contracted in 14 manufacturing sectors in February. The decline was conspicuous in printing, paper products, and wood products. There were four areas of expansion.
Timothy Fiore, chairman of the ISM Manufacturing Research Commission, said: “New orders continue to be sluggish, as buyers and suppliers struggle to reach agreement on price levels and lead times for delivery. A rising index of orders suggests that progress has been made,” the statement said. “Respondent companies will continue to maintain their current number of employees in the first half of this year, when business activity is expected to slow down, and are trying to prepare for an upturn in the second half,” it said.
The index of new orders posted its biggest month-on-month growth since 2020 in February. However, it is still below 50, suggesting that orders have continued to shrink. The production index fell to 47.3. The inventory index was almost unchanged from the previous month.
The purchase price index was 51.3, rising for two consecutive months. It surpassed 50 for the first time since September last year, indicating rising costs. The employment index fell to 49.1, suggesting a reduction in headcount.
See table for detailed statistics.
Original title:US Manufacturing Shrinks at Slower Pace; Prices Gauge Jumps(excerpt), Feb. US ISM Manufacturing Rises to 47.7; Est. 48.0 (excerpt)
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