Contraction in Manufacturing Industry Slowed

The ISM Manufacturing Index rose to 49.5 points in February – up 1.3 points from January’s reading of 48.2. February’s reading marked the fourth consecutive monthly decline in the manufacturing sector, as readings below 50 indicate contraction in the manufacturing industry. Of the eighteen industries, nine reported growth, while seven reported contraction. Business sentiment was mixed as some respondents reported solid domestic sales, but weak international demand.

The employment index registered 48.5 in February, an increase of 2.6 points, but the third consecutive month of contraction. Six industries including textiles, furniture and miscellaneous manufacturing reported growth, while eight industries including petroleum, apparel and transportation equipment reported contraction.

The index of new orders registered 51.5, unchanged from January. Twelve industries reported growth, while four industries reported a decrease in new orders.

Export orders fell 0.5 points to 46.5 in February, indicating contraction in export orders for the second consecutive month. Five industries including primary metals, miscellaneous manufacturing and machinery reported growth in orders, while seven industries reported declines.

The inventories index increased 1.5 points to 45.0 in February, indicating that raw materials inventories are contracting at a slower pace. Inventories have contracted for eight consecutive months now.

Read the ISM release.