PERFORMANCE BY INDUSTRY
The 11 manufacturing industries reporting growth in February — listed in order — are: Machinery; Paper Products; Apparel, Leather & Allied Products; Computer & Electronic Products; Miscellaneous Manufacturing; Transportation Equipment; Textile Mills; Plastics & Rubber Products; Electrical Equipment, Appliances & Components; Fabricated Metal Products; and Food, Beverage & Tobacco Products. The five industries reporting contraction in February are: Wood Products; Furniture & Related Products; Primary Metals; Printing & Related Support Activities; and Chemical Products.
WHAT RESPONDENTS ARE SAYING …
- “Depends on division, plant and market served.” (Transportation Equipment)
- “Current economy has killed new capital sales.” (Machinery)
- “Commodities are firming again.” (Food, Beverage & Tobacco Products)
- “First quarter orders up compared to prior two years!” (Fabricated Metal Products)
- “...lead times for electronic parts are pushing out to 8 to 24 weeks.” (Computer & Electronic Products)
COMMODITIES REPORTED UP/DOWN IN PRICE and IN SHORT SUPPLY
Commodities Up in Price
Aluminum (8); Cocoa Powder; Natural Gas (2); Paper; Plastics (2); Plastic Resins (2); Polyethylene; Polypropylene (3); Stainless Steel Products (2); Steel (8); and Steel Products (2).
Commodities Down in Price
Copper is the only commodity reported down in price.
Commodities in Short Supply
No commodities are reported in short supply.
Note: The number of consecutive months the commodity is listed is indicated after each item.
FEBRUARY 2010 MANUFACTURING INDEX SUMMARIES
PMI
Manufacturing continued to grow in February, but the rate of growth decelerated as the PMI registered 56.5 percent, a decrease of 1.9 percentage points when compared to January’s seasonally adjusted reading of 58.4 percent. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.
A PMI in excess of 42 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the PMI indicates growth for the 10th consecutive month in the overall economy, as well as expansion in the manufacturing sector for the seventh consecutive month. Ore stated, “The past relationship between the PMI and the overall economy indicates that the average PMI for January and February (57.5 percent) corresponds to a 5.2 percent increase in real gross domestic product (GDP). In addition, if the PMI for February is annualized, it corresponds to a 4.9 percent increase in real GDP annually."
New Orders
ISM’s New Orders Index registered 59.5 percent in February, 6.4 percentage points lower than the seasonally adjusted 65.9 percent registered in January. This is the eighth consecutive month of growth in the New Orders Index. A New Orders Index above 50.2 percent, over time, is generally consistent with an increase in the Census Bureau’s series on manufacturing orders (in constant 2000 dollars).
The 10 industries reporting growth in new orders in February — listed in order — are: Plastics & Rubber Products; Machinery; Paper Products; Computer & Electronic Products; Miscellaneous Manufacturing; Printing & Related Support Activities; Transportation Equipment; Fabricated Metal Products; Electrical Equipment, Appliances & Components; and Food, Beverage & Tobacco Products. The three industries reporting decreases in new orders in February are: Wood Products; Furniture & Related Products; and Chemical Products.
Production
ISM’s Production Index registered 58.4 percent in February, which is a decrease of 7.8 percentage points from the January reading of 66.2 percent (seasonally adjusted). An index above 51 percent, over time, is generally consistent with an increase in the Federal Reserve Board’s Industrial Production figures. This is the ninth consecutive month the Production Index has registered above 50 percent.
The nine industries reporting growth in production during the month of February — listed in order — are: Miscellaneous Manufacturing; Machinery; Computer & Electronic Products; Plastics & Rubber Products; Paper Products; Transportation Equipment; Food, Beverage & Tobacco Products; Fabricated Metal Products; and Electrical Equipment, Appliances & Components. The four industries reporting a decrease in production are: Wood Products; Furniture & Related Products; Chemical Products; and Printing & Related Support Activities.
Employment
ISM’s Employment Index registered 56.1 percent in February, which is 2.8 percentage points higher than the seasonally adjusted 53.3 percent reported in January. This is the third month of growth in manufacturing employment, and the highest reading since January 2005 (58.7 percent). An Employment Index above 49.8 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) data on manufacturing employment.
Ten of the 18 manufacturing industries reported growth in employment in February in the following order: Textile Mills; Petroleum & Coal Products; Apparel, Leather & Allied Products; Paper Products; Machinery; Miscellaneous Manufacturing; Transportation Equipment; Electrical Equipment, Appliances & Components; Fabricated Metal Products; and Food, Beverage & Tobacco Products. The four industries that reported decreases in employment during February are: Nonmetallic Mineral Products; Wood Products; Furniture & Related Products; and Plastics & Rubber Products.
Supplier Deliveries
The delivery performance of suppliers to manufacturing organizations was slower in February as the Supplier Deliveries Index registered 61.1 percent, which is 1 percentage point higher than the 60.1 percent registered in January (seasonally adjusted). This is the ninth consecutive month the Supplier Deliveries Index has been above 50 percent. A reading above 50 percent indicates slower deliveries.
The nine industries reporting slower supplier deliveries in February — listed in order — are: Electrical Equipment, Appliances & Components; Apparel, Leather & Allied Products; Transportation Equipment; Miscellaneous Manufacturing; Plastics & Rubber Products; Fabricated Metal Products; Paper Products; Machinery; and Computer & Electronic Products. The three industries reporting faster deliveries in February are: Petroleum & Coal Products; Printing & Related Support Activities; and Chemical Products.
Inventories
Manufacturers’ inventories contracted at a slower rate in February as the Inventories Index registered 47.3 percent. The index is 0.8 percentage point higher than the seasonally adjusted January reading of 46.5 percent. An Inventories Index greater than 42.6 percent, over time, is generally consistent with expansion in the Bureau of Economic Analysis’ (BEA) figures on overall manufacturing inventories (in chained 2000 dollars).
The five industries reporting higher inventories in February are: Apparel, Leather & Allied Products; Nonmetallic Mineral Products; Machinery; Computer & Electronic Products; and Paper Products. The eight industries that reported decreases in inventories in February — listed in order — are: Primary Metals; Miscellaneous Manufacturing; Printing & Related Support Activities; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Food, Beverage & Tobacco Products; Chemical Products; and Plastics & Rubber Products.
Customers’ Inventories(b)
The ISM Customers’ Inventories Index registered 37 percent in February, 5 percentage points higher than in January when the index registered 32 percent, and the 11th consecutive month the Customers’ Inventories Index has been below 50 percent. The index indicates that respondents believe their customers’ inventories are too low at this time.
The only industry reporting higher customers’ inventories during February is Furniture & Related Products. The 12 industries that reported lower customers’ inventories during February — listed in order — are: Electrical Equipment, Appliances & Components; Wood Products; Transportation Equipment; Machinery; Miscellaneous Manufacturing; Nonmetallic Mineral Products; Paper Products; Computer & Electronic Products; Fabricated Metal Products; Food, Beverage & Tobacco Products; Chemical Products; and Printing & Related Support Activities.
Prices(b)
The ISM Prices Index registered 67 percent in February, 3 percentage points lower than the 70 percent reported in January. This is the eighth consecutive month that the Prices Index has registered above 50 percent. While 39 percent of respondents reported paying higher prices and 5 percent reported paying lower prices, 56 percent of supply executives reported paying the same prices as in January. A Prices Index above 49.3 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) Index of Manufacturers Prices.
The 14 industries reporting paying increased prices during the month of February — listed in order — are: Plastics & Rubber Products; Fabricated Metal Products; Paper Products; Wood Products; Transportation Equipment; Food, Beverage & Tobacco Products; Printing & Related Support Activities; Electrical Equipment, Appliances & Components; Furniture & Related Products; Primary Metals; Machinery; Computer & Electronic Products; Miscellaneous Manufacturing; and Chemical Products. Nonmetallic Mineral Products is the only industry reporting paying lower prices during February.
Backlog of Orders(b)
ISM’s Backlog of Orders Index registered 61 percent in February, 5 percentage points higher than the 56 percent reported in January. Of the 86 percent of respondents who reported their backlog of orders, 33 percent reported greater backlogs, 11 percent reported smaller backlogs, and 56 percent reported no change from January.
The 13 industries reporting increased order backlogs in February — listed in order — are: Paper Products; Printing & Related Support Activities; Apparel, Leather & Allied Products; Computer & Electronic Products; Machinery; Food, Beverage & Tobacco Products; Plastics & Rubber Products; Primary Metals; Fabricated Metal Products; Transportation Equipment; Miscellaneous Manufacturing; Electrical Equipment, Appliances & Components; and Chemical Products. The three industries that reported decreases in order backlogs during February are: Petroleum & Coal Products; Furniture & Related Products; and Wood Products.
New Export Orders(b)
ISM’s New Export Orders Index registered 56.5 percent in February, 2 percentage points lower than the 58.5 percent reported in January. This is the eighth consecutive month of growth in the New Export Orders Index, following nine consecutive months of contraction.
The nine industries reporting growth in new export orders in February — listed in order — are: Apparel, Leather & Allied Products; Printing & Related Support Activities; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; Machinery; Computer & Electronic Products; Electrical Equipment, Appliances & Components; Chemical Products; and Transportation Equipment. Primary Metals and Fabricated Metal Products are the only two industries reporting decreases in new export orders during February.
Imports(b)
Imports of materials by manufacturers expanded in February as the Imports Index registered 56 percent, 0.5 percentage point lower than the 56.5 percent reported in January. This is the sixth consecutive month of growth in imports.
The 10 industries reporting growth in imports during the month of February — listed in order — are: Nonmetallic Mineral Products; Apparel, Leather & Allied Products; Printing & Related Support Activities; Miscellaneous Manufacturing; Furniture & Related Products; Machinery; Computer & Electronic Products; Electrical Equipment, Appliances & Components; Transportation Equipment; and Fabricated Metal Products. Chemical Products is the only industry reporting a decrease in imports during February.
Buying Policy
Average commitment lead time for Capital Expenditures is unchanged at 118 days. Average lead time for Production Materials decreased 3 days to 50 days. Average lead time for Maintenance, Repair and Operating (MRO) Supplies increased 3 days to 24 days.
