Steel Products

ISM PMI Rises to 54.2% in February

Written by Sandy Williams

Written by: Sandy Williams

Activity in the manufacturing sector continued to improve in February according the latest Institute for Supply Management Manufacturing Report on Business. The February PMI (Purchasing Managers Index) registered at 54.2, indicating growth in the manufacturing sector for the third consecutive month since its drop below the neutral point to 49.9 in November 2012. The PMI was it its highest reading since June 2011 when it registered at 55.8 percent.

A reading above 50 percent indicates that the manufacturing economy is generally expanding while a reading below 50 percent indicates a contraction. A reading above 42.2 percent, over a period of time, indicates an expansion in the overall economy. If the average PMI for January and February is annualized (53.7), it corresponds to a 3.6 percent annual increase in real GDP.

New orders rose 4.5 percentage points to 57.8 percent in February. Production grew for the sixth consecutive month registering at 57.6 percent. Employment continues to show growth but at a slower pace in February registering a decrease to 52.6 percent in February.

Supplier deliveries to manufacturers slowed for the fourth consecutive month to register at 51.4 percent in February. The index for inventories was flat for February at 51.5 rising just 0.5 percent, while customers’ inventories dropped 2 percentage points to 46.5 percent for the month.

Imports rose 4 percentage points to 54 percent in February showing growth for the second time in the past three months. New export orders also grew 3 percentage points to 53.5 percent—fabricated metal products, transportation equipment and machinery reported growth in new export orders. Import and export of primary metals decreased in February.

Lead time for capital expenditures decreased 8 days to 112 days and lead times for production materials decreased 3 days to 56 days in February.

Steel bar was the only commodity reported in short supply.

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