Expansion in the manufacturing economy improved in February with contributions from new orders and production, the Institute for Supply Management said today.
The Tempe, Ariz.-based group’s manufacturing index, known as the PMI accelerated to 58.6 percent last month, up from 57.6 percent in January.
Manufacturing is experiencing “a continuing demand-driven expansion,” Timothy R. Fiore, chair of ISM’s Manufacturing Business Survey Committee, said on a conference call.
The sector, he added, has rebounded “from the obstacles presented by Omicron,” the most recent variant of COVID-19.
The index is based on a survey of managers in 18 industries. A PMI above 50 percent indicates economic expansion. Below that market means economic contraction.
The index has averaged 60.3 percent the past 12 months. The PMI has been in positive territory for 21 consecutive months. The index is considered a leading indicator and a barometer of where manufacturing is heading.
In February, 16 industries reported expansion, including transportation equipment, machinery, miscellaneous manufacturing, and fabricated metal products. The only industry reporting a contraction was wood products.
ISM’s New Orders Index registered at 61.7 percent last month, up from 57.9 percent in January. Thirteen of 18 industries reported gains in orders. The category is considered important because orders lead to more production later.
The group’s Production Index moved up to 58.5 percent in February from 57.8 percent the month before. Ten industries reported increases in output. Two, furniture and nonmetallic mineral products reported decreases.
The Employment Index slipped to 52.9 percent from 54.5 percent in January. Ten industries reported job gains while three reported decreases in employment.
On the conference call, Fiore was asked about the impact of Russia’s war against Ukraine. Western nations have imposed economic sanctions against Russia because of its invasion of Ukraine.
“I don’t see it dragging down manufacturing expansion,” Fiore said. “This thing is going to take its course.”
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