February 2014 Manufacturing ISM Report On Business - PMI At 53.2%

March 3, 2014

New Orders, Employment and Inventories Growing; Production Contracting; Supplier Deliveries Slowing

Economic activity in the manufacturing sector expanded in February for the ninth consecutive month, and the overall economy grew for the 57th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business.  The report was issued today by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management (ISM) Manufacturing Business Survey Committee. 

Manufacturing expanded in February as the PMI registered 53.2 percent, an increase of 1.9 percentage points when compared to January's reading of 51.3 percent.  A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.

A PMI in excess of 43.2 percent, over a period of time, generally indicates an expansion of the overall economy.  Therefore, the February PMI indicates growth for the 57th consecutive month in the overall economy, and indicates expansion in the manufacturing sector for the ninth consecutive month.  Holcomb stated, "The past relationship between the PMI and the overall economy indicates that the PMI for January and February (52.3 percent) corresponds to a 3 percent increase in real gross domestic product (GDP) on an annualized basis.  In addition, if the PMI for February (53.2 percent) is annualized, it corresponds to a 3.3 percent increase in real GDP.

As in January, several comments from the panel mention adverse weather conditions as a factor impacting their businesses in February.  Other comments reflect optimism in terms of demand and growth in the near term.

Of the 18 manufacturing industries, 14 are reporting growth in February.

Source: Institute For Supply Management