Primary metals were among the 15 industries to report growth on the Institute of Supply Management’s (ISM) manufacturing index in February.
According to the latest ISM data, February’s Production Index decreased by 4 percentage points to 50.3pc compared to January while the backlog of orders Index went up by 4.6 percentage points to 50.3pc from 45.7pc in January.
The Supplier Index increased by 4.4 percentage points to 57.3pc compared to January and the Employment Index also increasing by 0.3 percentage points to 46.9pc. On the other hand, Inventories were down by 2.3 percentage points to 46.5pc, the price index decreased by 7.4 percentage points to 45.9pc, new exports fell by 2.1pc points to 51.2pc, and new imports dropped by 8.7pc points to 42.6pc.
However, the overall sentiment for near-term growth in March was marginally positive as February’s PMI remains above 50pc. Economic activity grew cautiously in February with PMI at 50.1pc, down 0.8pc from January. Four of the 10 subindexes recorded expansion in February, down from six in January.
The data indicated that while prices as well as demand and consumption contracted in February with a decline in production overshadowing the slight increase in employment. Petroleum and coal, transportation equipment, and nonmetallic minerals were among the three industries that reported a decline in growth during the month.
Supply change challenges related to Covid-19’s impact included delayed production resulting in longer lead times, constraints, and increased pricing in some industries, especially, electronics. Long-term supply chain concerns may improve US PMI though, as companies are seeking dual sources stateside just in case their corresponding Chinese sources are affected longer-term.
Overall, the economy continues its 130th straight month of growth, albeit at a slower pace as the manufacturing sector continues to decelerate for the second consecutive month.