01 March 2013 17:32 [Source: ICIS news]
WASHINGTON (ICIS)--The overall US manufacturing sector saw continued growth in February, a respected survey group said on Friday, marking the third straight month of expansion amid a surge in new orders for manufactured goods.
However, the nation’s chemicals industry was one of only three manufacturing sectors to show contraction last month, according to the survey.
In its monthly report, the Institute for Supply Management (ISM) said that its closely watched purchasing managers index (PMI) for February saw an increase of 1.1 percentage points to 54.2%, up from the 53.1% reading in January and the 50.2% measure in December.
The three-month upturn in the PMI is noteworthy because the index had slipped just below the 50% midpoint measure in November 2012, indicating that manufacturing industries were beginning to contract.
The PMI is a composite of supplier responses to the ISM’s monthly survey of 10 different business performance measures in 18 major manufacturing sectors.
A PMI reading above 50% indicates the ?xml:namespace>
Bradley Holcomb, chairman of the institute’s business survey committee, said that the February PMI of 54.2% is the highest since June 2011 when the index was at 55.8%.
Holcomb noted that among the PMI’s 10 subsidiary measures, the new orders index rose by 4.5 percentage points in February from January. The index measuring manufacturers’ orders backlogs saw a sharp gain of 7.5 percentage points last month.
Those solid advances in two key measures suggest that manufacturing could show further growth when the March survey results are available on 1 April.
Of the 18 manufacturing industries tracked by the institute, 15 reported growth in February, including plastics and rubber products.
But three production sectors – textiles, computers and chemicals – reported contraction, the institute said.
An unidentified chemicals industry executive who responded to the survey was quoted as saying that “customer demand has softened”.
“At first, that decline was consistent with seasonal patterns," the chemicals executive said, “but it has persisted beyond historical periods.”
With the PMI climbing to 54.2%, the index suggests that the overall manufacturing sector is beginning to pull out of the mid-year slump it encountered in 2012 when the index was just barely above the 50% midpoint for about six months and dipped narrowly into contraction in November.
Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy
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