Order increase helps February PMI rebound
Even with a slowdown in production and the continuing harsh winter throughout most of the country, the monthly manufacturing PMI Index showed a 1.9 percentage point
increase in February to 53.2%. The index has fallen in January to an eight-month low of 51.3%, but the February increase kept the PMI’s winning streak intact with nine straight months of growth, and the index has been at or above the 50.0% level for more than a year.
“As in January, several comments from the panel mention adverse weather conditions as a factor impacting their businesses in February,” said Bradley J. Holcomb, chair of the Institute for Supply Management Manufacturing Business Survey Committee, which creates the PMI report. “Other comments reflect optimism in terms of demand and growth in the near term.”
New orders rose 3.3 percentage points to 53.3%. It was the ninth straight month of growth for new orders, and reversed a slip similar to the overall PMI in January.
Other than the weather, the big concern in the PMI data in February was the fall in the production index. That dropped below the growth
threshold for the first time in 17 months to 48.2%. That was a decrease of 6.6 percentage points from January. Apparel and leather goods were among the categories with production declines, while bellwethers such as food, heavy machinery and automotive did post production increases in the month.
Among the comments from PMI panel members were:
- “Cold weather is having a negative impact on our business (garment). Orders are down.”(Apparel, Leather & Allied Products)
- “Continue to have trouble finding qualified CNC machinists. Desperately trying to hire CNC programmers.” (Fabricated Metal Products)
- “Bad weather hampering logistics across the country.” (Petroleum & Coal Products)
- “Very strong month in terms of growth.” (Computer & Electronic Products)
- “Many raw material disruptions due to weather and back-ups at the ports.” (Chemical Products)
- “"Slow January, but February orders are picking up.” (Food, Beverage &Tobacco Products)
- "Conservative optimism re-kindling. Steady as it goes.” (Machinery)
The PMI remains the strongest indicator of overall economic growth. For the 57th straight month, the PMI was above the 43.2% growth level for the overall economy. Holcomb said this month’s PMI indicates a growth rate of 3.3% in GDP for the year.