US manufacturing slides more in Feb, no ’09 recovery seen

02 March 2009 16:00  [Source: ICIS news]

WASHINGTON (ICIS news)--All major US manufacturing sectors, including chemicals and plastics, continued to contract in February, the Institute for Supply Management (ISM) said on Monday, noting that producers are pessimistic about a recovery this year.

The institute said its closely watched purchasing managers index (PMI) registered a reading of 35.8% for February, essentially flat with the January PMI of 35.6%.

“Manufacturing continues to decline at a rapid rate,” said Norbert Ore, chairman of the institute’s survey committee.

A PMI reading of 50% or higher indicates that manufacturing industries - key downstream consuming sectors of chemicals and resins - are experiencing growth. A reading below 50% means that the broad manufacturing sector is in contraction.

Each month the ISM surveys purchasing executives in key manufacturing sectors on ten economic measures to produce the purchasing managers index.

Although the February PMI showed a razor-thin gain compared with January, that narrow advance was more than offset by what the institute said was broad negative sentiment among surveyed industries.

Referring to the slight PMI gain in February, Ore said that “While production has slowed its rate of decline, [manufacturing] employment continues to fall precipitously”.

In addition, Ore noted that although prices continue to decline, “price advantages are not sufficient to overcome manufacturers’ apparent loss of demand”.

“Survey respondents appear generally pessimistic about recovery in 2009,” Ore said, noting that none of the manufacturing industries surveyed reported growth in February. 

It is rare for all of the surveyed sectors to report contraction.  Usually, at least two or three of the 18 surveyed sectors will show some growth, however slim.

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By: Joe Kamalick
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