Sections: Economy

ISM Manufacturing Report On Business in Contraction for Fifth Straight Month

The Institute for Supply Management’s Manufacturing Report On Business Survey. (Photo: REUTERS)

The Institute for Supply Management (ISM) Manufacturing Report On Business rose to 49.5 last month from 48.2 in January, though it remains in contraction. Though it beat the median forecast of a slight rise to 48.5, the monthly gauge of manufacturing activity nationwide echoed regional surveys showing a struggling wage-driving sector.

Readings above 50 point to expansion, while those below indicate contraction. The Manufacturing Report On Business contracted for the fifth straight month, even as the overall economy grew for the 81st consecutive month.

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

The Chicago Business Barometer, the Institute for Supply Management-Chicago’s gauge of manufacturing activity in the Midwest region, fell to 47.6 in February. The Philadelphia Federal Reserve’s Manufacturing Business Outlook Survey, which was released last week, continued to show mid-atlantic manufacturing in contraction in February. Further, the Empire State Manufacturing Survey, the New York Federal Reserve gauge of manufacturing activity in the region, also remained stuck in contraction territory.

MANUFACTURING AT A GLANCE FEBRUARY 2016
Index	Series Index Feb	Series Index Jan	Percentage Point Change	Direction	Rate of Change	Trend* (Months)
PMI^®	49.5	48.2	+1.3	Contracting	Slower	5
New Orders	51.5	51.5	0.0	Growing	Same	2
Production	52.8	50.2	+2.6	Growing	Faster	2
Employment	48.5	45.9	+2.6	Contracting	Slower	3
Supplier Deliveries	49.7	50.0	-0.3	Faster	From Unchanged	1
Inventories	45.0	43.5	+1.5	Contracting	Slower	8
Customers’ Inventories	47.0	51.5	-4.5	Too Low	From Too High	1
Prices	38.5	33.5	+5.0	Decreasing	Slower	16
Backlog of Orders	48.5	43.0	+5.5	Contracting	Slower	9
Exports	46.5	47.0	-0.5	Contracting	Faster	2
Imports	49.0	51.0	-2.0	Contracting	From Growing	1
OVERALL ECONOMY				Growing	Faster	81
Manufacturing Sector				Contracting	Slower	5

Manufacturing ISM^® Report On Business^® data is seasonally adjusted for New Orders, Production, Employment and Supplier Deliveries indexes.

*Number of months moving in current direction.

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PPD Business Staff

PPD Business, the economy-reporting arm of People's Pundit Daily, is "making sense of current events." We are a no-holds barred, news reporting pundit of, by, and for the people.