The overall economy grew for the 106th straight time, the Institute for Supply Management reported Thursday.
According to the ISM's monthly report on business, the ISM index increased to 60.8 in February from 59.1 in January.
Economists polled by IFR Markets predicted the index would be 58.7.
An index reading below 50 signals a slowing economy, while a level above 50 suggests expansion. A reading of 50 shows the sector was unchanged in the month.
The prices paid index increased to 74.2 from 72.7. The employment index gained to 59.7 from 54.2.
The production index slipped to 62.0 from 64.5, the new orders index declined to 64.2 from 65.4; the supplier deliveries index rose to 61.1 from 59.1; the export orders index grew to 62.8 from 59.8; and the imports index rose to 60.5 from 58.4.
The inventories index climbed to 56.7 from 52.3; the customers' inventories index fell to 43.7 from 45.6; and backlog of orders gained to 59.8 from 56.2.
Respondents' comments included:
- “Availability of electronic components, long lead times, allocations and constraints continue to wreak havoc in the purchasing cycle, with no end in sight at this time.” (Computer & Electronic Products)
- “Our business saw [an] increase in fourth quarter, and it continued in January 2018. CapEx purchase deliveries are moving out globally.” (Chemical Products)
- “Labor market continues to be tight for supply chain talent in the Southern California area. Overall economy is strong.” (Transportation Equipment)
- “Employment is one of our biggest challenges. No labor available.” (Food, Beverage & Tobacco Products)
- “Steel market is doing rather well. Everybody is out of what I need.” (Fabricated Metal Products)
- “It seems the tax break for business is making a difference. Customers are spending more for capital equipment.” (Machinery)
- “Hiring has picked up for direct-hire employees. Due to end-of-2017 performance and improvement in commodity price, there has been an increase in capital budget.” (Petroleum & Coal Products)
- “Business is very strong, and our lines are running at full capacity.” (Plastics & Rubber Products)
- “We expect to have a strong year in 2018. In expectation, we have added to our sales staff and plan on adding to our production staff.” (Miscellaneous Manufacturing)
- “The weakening U.S. dollar in relationship to the yuan is starting to impact importing cost. We are starting to see more supplier price increases.” (Electrical Equipment, Appliances & Components)