By Nick Partie
Economic activity in the manufacturing sector expanded in February for the ninth consecutive month according to the Institute for Supply Management (ISM) Manufacturing Report. In addition to the manufacturing sector, ISM reported that the overall economy has expanded for the 57th consecutive month.
The manufacturing sector increased by 1.9 percentage points, recovering from the slower January. The continued expansion is driven by growth in new orders, employment and prices. Companies have become more optimistic and grown their inventories in February, although the report continues to show that there is a perception that customers’ inventories remain too low.
One of the few unfavorable metrics was the decrease in the production index which contracted in February after 17 consecutive months of growth, and hitting its lowest reading since mid-2009. It is believed this downturn was the result of adverse weather conditions across the nation, and the favorable readings in the other indices indicate that this contraction will be short lived.
This information represents 18 different manufacturing industries of which 14 have shown growth in February. This leaves plenty of room for optimism as we continue into the year with evident growth despite the harsh winter.