ISM: Manufacturing growth continues, but slows
Index at 52.4% is still positive for 31st straight month, though it is down from the 54.1% index in January 2012
Economic activity in the manufacturing sector expanded in February for the 31st consecutive month, and the overall economy grew for the 33rd consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business.
"The PMI registered 52.4%, a decrease of 1.7 percentage points from January's reading of 54.1%, indicating expansion in the manufacturing sector for the 31st consecutive month,” said Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management Manufacturing Business Survey Committee. “The New Orders Index registered 54.9%, a decrease of 2.7 percentage points from January's reading of 57.6%, reflecting the 34th consecutive month of growth in new orders.
“As was the case in January, new orders, production and employment all grew in February — although at somewhat slower rates than in January,” Holcomb added. “Comments from the panel continue to reflect a generally positive outlook for the next few months."
Among the comments from survey respondents:
- "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 and 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 and 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 and 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)
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Before the calendar turned, 2016 already had the makings of a pivotal year for manufacturing, and for the world.
There were the big events for the year, including the United States as Partner Country at Hannover Messe in April and the 2016 International Manufacturing Technology Show in Chicago in September. There's also the matter of the U.S. presidential elections in November, which promise to shape policy in manufacturing for years to come.
But the year started with global economic turmoil, as a slowdown in Chinese manufacturing triggered a worldwide stock hiccup that sent values plummeting. The continued plunge in world oil prices has resulted in a slowdown in exploration and, by extension, the manufacture of exploration equipment.
Read more: 2015 Salary Survey