New Orders, Employment and Inventories Growing; Production Contracting; Supplier Deliveries Slowing

Economic activity in the manufacturing sector expanded in February for the ninth consecutive month, and the overall economy grew for the 57th consecutive month, say the nation's supply executives in the latest Manufacturing ISM® Report On Business®.

The report was issued this week by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee. "The February PMI® registered 53.2 percent, an increase of 1.9 percentage points from January's reading of 51.3 percent indicating expansion in manufacturing for the ninth consecutive month. The New Orders Index registered 54.5 percent, an increase of 3.3 percentage points from January's reading of 51.2 percent. The Production Index registered 48.2 percent, a decrease of 6.6 percentage points compared to January's reading of 54.8 percent. Inventories of raw materials increased by 8.5 percentage points to 52.5 percent. As in January, several comments from the panel mention adverse weather conditions as a factor impacting their businesses in February. Other comments reflect optimism in terms of demand and growth in the near term."

Of the 18 manufacturing industries, 14 are reporting growth in February in the following order: Textile Mills; Wood Products; Machinery; Printing & Related Support Activities; Plastics & Rubber Products; Nonmetallic Mineral Products; Transportation Equipment; Paper Products; Food, Beverage & Tobacco Products; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Furniture & Related Products; Primary Metals; and Chemical Products. The three industries reporting contraction in February are: Apparel, Leather & Allied Products; Petroleum & Coal Products; and Miscellaneous Manufacturing.

WHAT RESPONDENTS ARE SAYING ...

    "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)
    "Higher than normal demand for this time of year." (Transportation Equipment)
    "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)
    "We are seeing competition heat-up this year." (Plastics & Rubber Products)
    "Slow January, but February orders are picking-up." (Food, Beverage & Tobacco Products)
    "Conservative optimism re-kindling. Steady as it goes." (Machinery)
    "Business continues to be stronger. Was at the KBIS/IBS show last week, and the feeling was much the same. Good last year and this year shows great promise." (Furniture & Related Products)

To read the full report, go to http://www.ism.ws/ISMReport/MfgROB.cfm?navItemNumber=12942