US manufacturing returns to contraction mode - PMI

03 March 2008 16:10  [Source: ICIS news]

WASHINGTON (ICIS news)--The US manufacturing sector contracted again in February, reversing a slim recovery seen in January, with chemicals among the key industrial sectors in decline, a respected survey group said on Monday.

 

The Institute for Supply Management said its closely watched purchasing managers index (PMI) fell to 48.3% in February, its lowest point in 12 months.

 

The index, which measures business activity in 19 major manufacturing sectors, was at 50.7% in January following the earlier 12-month low of 48.4% reported for December 2007.

 

An index measure of 50% or better indicates that the US manufacturing economy is generally expanding.  A score below 50% indicates that the sector is in contraction.

 

The broad US manufacturing industry is a major downstream consumer of chemicals and chemicals-related products.

 

“The manufacturing sector failed to grow during the month as the PMI fell below 50%, which indicates weaker performance in February when compared with January,” said Norbert Ore, chairman of the institute’s survey committee.

 

Ore noted that new orders for manufactured goods continued to show a decline in February, marking the third consecutive month of downward trend since November.

 

He said that while manufacturers report that their inventories are at reasonable levels, “the major concern is rising prices and falling volume”.

 

Chemicals manufacturing was among seven key industries reporting contraction in February, along with machinery, furnishings and textiles among others.

 

However, the institute said that plastics and rubber products reported growth in February along with seven other sectors such as wood products, metals, foods, miscellaneous manufacturing and transportation equipment.

By: Joe Kamalick
+1 713 525 2653

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