Manufacturing up for 9th straight month

Don Hogsett, Jane Kitchen, March 8, 2004

In continued good news for America's smoke-stack economy, manufacturing activity grew in February for a ninth straight month, if at a somewhat slower pace than during January, reported the nation's purchasing managers.

The Institute for Supply Management's monthly gauge of activity in the manufacturing sector — the Purchasing Managers' Index — came in at a level of 61.4, down 2.2 percentage points from January's reading of 63.6.

Even with the modest dip, February numbers are substantially above a reading of 55 recorded six months ago in August, and above a year-ago level of 46.2.

Norbert Ore, chairman of the Institute for Supply Management's Business Survey Committee, said, "This month, many respondents are particularly encouraged by the increased breadth of the recovery in manufacturing."

Contributing to the modest monthly decline, said Ore, were lower readings for both new orders and production, "but they are still at very positive levels."

Ore added, "Comments from purchasing and supply managers have become increasingly optimistic as more and more industries indicate improvement. The general tone of the panel has improved significantly in these first two months of 2004. Their major concerns are steel availability and energy prices."

He continued, "Taking into account the fact that all 20 industries reported growth in February, combined with a manufacturing economy that has been growing for the past nine months, it appears that the manufacturing sector has sustainable momentum at this point."

In a particularly encouraging sign that the sector is gaining strength, the purchasing managers' Employment Index grew for a fourth straight month, extending a recent upward trend following 37 straight months of decline.

February snapshot
Manufacturing benchmarks
Month-over-month percentage-point change

Source: Institute for Supply Management
Purchasing Managers' Index -2.2%
New Orders -4.7
Production -7.2
Employment +3.4
Inventories +0.5
Customers' Inventories +1.5
Prices Manufacturers Pay +6.0
Order Backlogs +1.5
Export Orders -2.6
Imports +0.7

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