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.

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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, cvavra@cfemedia.com.