TEMPE, Ariz. — Manufacturing failed to grow in February, according to the Institute for Supply Management (ISM).
“The manufacturing sector failed to grow during the month as the PMI fell below 50 percent, which indicates weaker performance in February when compared to January,” said Norbert Ore, chair of the ISM Manufacturing Business Survey Committee. “Manufacturers’ order backlogs continue to erode as the New Orders Index remained below 50 percent for the third consecutive month. With the Inventories and Customer Inventories Indexes indicating that manufacturing inventories are at reasonable levels, the major concern is rising prices and falling volume.”
The PMI for February was 48.3 percent, down 2.4 points from January. A reading above 50 percent indicates the manufacturing economy is generally expanding, while a reading below 50 signals a contraction.
New order slipped 0.4 percent to 49.1, as production dropped 4.5 points to 50.7.
Employment was down 1.1 points to 46 percent.
Inventories contracted in February, with the index falling 3.7 points to 45.4 percent. Backlog of orders rose 1 point to 45 percent.
At 75.5 percent, the Prices Index indicates manufacturers are paying higher prices on average, though at a slightly slower rate, than in January.
New export orders were down 2.5 points to 56 percent, while imports slipped 5 points to 47.5 percent.
“Today’s ISM report confirms that even the strong export sector cannot offset the overall domestic slowdown due in large part to weak residential construction, weak auto sales, and a growing credit crunch,” said Thomas J. Duesterberg, President and Chief Executive Officer of the Manufacturers Alliance/MAPI. “Factory orders reported last week also showed weakness in computer and information technology output, and sluggishness in overall business investment. High commodity prices, especially for energy and metals, are also starting to erode profit margins. Monetary and fiscal stimulus will cushion the slowdown, but additional policy measures both here and abroad may be needed to bring us out of recession.”
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