March 6, 2013
Manufacturing Expands in February
Economic activity in the manufacturing sector expanded in February for the third consecutive month, hitting a PMI of 54.2 percent, according to the Tempe, Ariz.-based Institute for Supply Management. The reading of 54.2 percent was 1.1 percentage points better than January’s reading. It reflects the highest PMI since June 2001, when the index registered 55.8 percent.
"The past relationship between the PMI and the overall economy indicates that the average PMI for January and February of 53.7 percent corresponds to a 3.6 percent increase in real gross domestic product on an annualized basis. In addition, if the PMI for February is annualized, it corresponds to a 3.7 percent increase in real GDP annually," says Bradley Holcomb, chairman of ISM's Manufacturing Business Survey Committee.
Of the 18 manufacturing industries, 15 reported growth in February, including fabricated metal products, transportation equipment and miscellaneous manufacturing.
The New Orders Index registered 57.8 percent, an increase of 4.5 percent over January's reading, indicating growth in new orders for the second consecutive month. As was the case in January, all five of the PMI's component indexes — new orders, production, employment, supplier deliveries and inventories — registered in positive territory in February. In addition, the backlog of orders, exports and imports indexes all grew in February relative to January.
ISM's Production Index registered 57.6 percent in February, an increase of 4 percentage points compared to January. ISM's Employment Index registered 52.6 percent in February, which is 1.4 percentage points lower than January, but still indicates growth for the 41st consecutive month.