Economy

ISM: Manufacturing contracts again in February

March 4, 2024

US manufacturing activity continued to slump in February, contracting for the 16th consecutive month, according to the latest report from the Institute for Supply Management (ISM).

The ISM Manufacturing PMI was 47.8% in February, off 1.3 percentage points from the 49.1% logged in January. A reading above 50 indicates the manufacturing economy is growing, while a reading below 50 indicates contraction.

“The US manufacturing sector continued to contract, and at a faster rate compared to January, with demand slowing, output easing, and inputs remaining accommodative,” ISM Chair Timothy R. Fiore said in a statement.

However, ISM said the overall economy expanded for the 46th straight month in February after one month of contraction in April 2020. The institute noted that a Manufacturing PMI above 42.5%, over a period of time, usually indicates the overall economy is expanding.

Fiore said demand moderated in February, with the New Orders Index back in contraction “as seasonal headwinds were too strong to overcome.” The New Orders Index stood at 49.2% in February, down from 52.5% in January.

“Demand is at the early stages of recovery, and production execution is relatively stable compared to January,” Fiore added.

Eight manufacturing industries reported growth in February, ISM said, including primary metals and fabricated metal products.

Ethan Bernard

Ethan Bernard is a reporter and editor for Steel Market Update. He previously worked for American Metal Market as a copy editor in the New York office for two years starting in 2008. Later, he copy edited AMM’s monthly magazine on a freelance basis from 2015 until 2017. With experience in financial copywriting and textbook publishing, he holds a BA in Comparative Literature from UC Berkeley, and an MFA. in Creative Writing from New York University. He can be reached at ethan@steelmarketupdate.com or 724-759-7871.