PMI continues strong growth trend in February

The Institute for Supply Management’s purchasing manufacturers' index (PMI) rose to 57.7% in February, which marks the sixth straight month of growth.

By Chris Vavra, CFE Media March 1, 2017

New orders and production levels continue to drive the manufacturing industry’s growth as they reached new highs in February. As a result, the Institute for Supply Management’s purchasing manufacturers’ index (PMI) jumped another 1.7 percentage points in February to 57.7%.

The new orders index had a huge growth of 4.7 percentage points to 65.1%, the third straight month that index was above 60%. The production index jumped 1.5 percentage points to 62.9%. The only down note was the employment index dropping 1.9 percentage points to 54.2%. Overall, though, the manufacturing industry looks very busy and strong with 17 of the 18 industries reporting growth in February. 

"Comments from the panel largely indicate strong sales and demand, and reflect a positive view of business conditions with a watchful eye on commodities and the potential for inflation," said Bradley Holcomb, chairman of the Institute for Supply Management’s manufacturing business survey committee. 

Among the comments from committee members were:

  • "Business [is] improving and lead times are extending by two or more weeks." (Chemical Products)
  • "Very positive outlook for this quarter. Production goals have been adjusted multiple times and increased each time due to demand." (Computer & Electronic Products)
  • "Product demand continues to be solid." (Plastics & Rubber Products)
  • "Bookings are heavy early in the season. Expect robust first half of the year." (Primary Metals)
  • "Demand still outstrips capacity. Competitors have announced heavy capital investments to increase capacity." (Food, Beverage & Tobacco Products)
  • "Sales and business continue to be strong and increasing." (Machinery)
  • "Even though oil and gas prices are on the upswing, we still face a tough 2017 and will continue to save on costs." (Petroleum & Coal Products)
  • "Major focus on commodities and potential [for] further inflation." (Electrical Equipment, Appliances & Components)

While the PMI has been above the growth level of 50% for 10 of the last 11 months, the February reading of 57.7% marked the sixth consecutive month of growth, and the fifth straight month growth rate exceeded 1.0 percentage points. 

Chris Vavra, production editor, CFE Media,