NEW YORK – The overall economy grew for the thirty-third straight time, while the manufacturing sector expanded for the thirty-first time, the Institute for Supply Management reported Thursday.
According to the ISM’s monthly report on business, the ISM index slipped to 52.4 in February from 54.1 in January.
Economists polled by Thomson Reuters predicted the index would climb to 54.6.
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 PMI registered 52.4 percent, a decrease of 1.7 percentage points from January’s reading of 54.1 percent, indicating expansion in the manufacturing sector for the 31st consecutive month," said Bradley Holcomb, chair of the Institute of Supply Management's manufacturing business survey committee. “The New Orders Index registered 54.9 percent, a decrease of 2.7 percentage points from January’s reading of 57.6 percent, reflecting the 34th consecutive month of growth in new orders. Prices of raw materials increased for the second consecutive month, with the Prices Index registering 61.5 percent. As was the case in January, new orders, production and employment all grew in February — although at somewhat slower rates than in January. Comments from the panel continue to reflect a generally positive outlook for the next few months.”
The closely watched prices paid index jumped to 61.5 from 55.5. The employment index was at 53.2, down from 54.3 the prior month.
The production index decreased to 55.3 from 55.7, the new orders index fell to 54.9 from 57.6; the supplier deliveries index dipped to 49.0 from 53.6; the export orders index increased to 59.5 from 55.0; and the imports index rose to 54.0 from 52.5.
The inventories index held at 49.5; the customers’ inventories index slid to 46.0 from 47.5; and backlog of orders dropped to 52.0 from 52.5.
Respondents’ comments included:
“Business is holding steady. Concern over commodity prices ongoing.” (Chemical Products)
“Still somewhat cautious about recovery. Expecting a good year, but not seeing orders yet.” (Machinery)
“Demand remains consistent to strong on all levels.” (Paper Products)
“Demand from auto makers is getting stronger.” (Fabricated Metal Products)
“Manufacturing is busy. Spending money on new equipment to accommodate customer demands. Material prices are staying in check.” (Food, Beverage & Tobacco Products)
“There seems to be a much more positive outlook for the economy. Customers are ordering material for stock rather than just working hand-to-mouth.” (Fabricated Metal Products)
“Global GDP softening and beginning to impact the demand chain.” (Computer & Electronic Products)
“Production is busy — several new large projects.” (Primary Metals)
“Customers [are] lowering inventory levels, anticipating price decrease due to third-party published reports on materials.” (Plastics & Metal Products)
“We are optimistic about the U.S. market this year, a little hesitant about what may happen in Europe and unsure about China.” (Transportation Equipment)
“Shipments are increasing over last year. Waiting to see if the trend continues.” (Wood Products)