US manufacturing grows for 7th month in Feb but slower

01 March 2010 15:51  [Source: ICIS news]

WASHINGTON (ICIS news)--US manufacturing activity increased in February for the seventh straight month, a key survey reported on Monday, although the rate of improvement was not as strong as that seen in January.

The Institute for Supply Management (ISM) said its closely watched purchasing managers index (PMI) was at 56.5% in February.

That rate of expansion is less than the PMI of 58.4% recorded in January but it nonetheless shows that the broad US manufacturing sector is generally in growth mode.

A PMI reading of 50% or higher indicates that the manufacturing industry is expanding. A reading below 50% means that the sector is contracting.

The index is based on a survey of purchasing managers in 18 key manufacturing industries, including chemicals and plastics, with questions on their new orders, production, employment and other measures.

In March 2009, the purchasing managers index was at 36.4% and has seen more or less steady improvement since then. The PMI moved above the crucial 50% mark in August last year with a reading of 52.8% and has been above 50% since.

The US manufacturing industry is a crucial downstream consuming sector for a wide variety of chemicals and plastics.

Norbert Ore, the institute’s PMI survey manager, noted that while February’s results show that manufacturers’ new orders and production were not as strong as in January, “they still show significant month-over-month growth”.

“Additionally, the employment index is very encouraging, as it is up 2.8 percentage points for the month to 56.1%,” he said.  “With these levels of activity, manufacturers are seemingly willing to hire where they have orders to support higher employment.”

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