Chicago PMI drops to six-month low in February

Lloyd Doyle
March 2, 2018

Tempe, AZ, March 1, 2018-The February Purchasing Manager's Index (PMI) registered 60.8%, an increase of 1.7 percentage points from the January reading of 59.1%, according to the latest Manufacturing ISM Report On Business. It was the highest index reading since May 2004.

Timothy Fiore, chairman of ISM's factory survey committee, said, "All indications are that demand will continue to grow".

"Production could not keep pace with new order input and customer inventory needs, resulting in higher backlogs". However, Fiore said both are still running at strong levels.

The report showed that out of the 31 subsectors surveyed, 21 recorded growth in February, down from 29 subsectors that recorded growth out of the 34 subsectors surveyed in January.

"This data demonstrates the steady growth in the manufacturing sector, which we have seen consecutively over the past year", Anthony Sasso, president of TD Equipment Finance at TD Bank, said in a written statement after the report was released. Regarding the latter number, exports once again expanded at their best rate since April 2011, with global sales helping to fuel stronger overall demand. A reading above 50% indicates economic expansion and below 50% indicates contraction.

The Manufacturing PMI dropped for the second consecutive month to 56.3 percent, from a peak of 59.3 percent recorded in December.

ISM's Employment Index advanced to 59.7%, up from 54.2% in January. Fifteen industries reported expansion, while one reported a decrease in employment.

The sample comments tended to echo those findings, with healthy gains in demand, production and hiring and a very optimistic outlook for the coming months.

The New Orders Index decreased 1.2 points to 64.2 in February, indicating growth for the twenty-sixth consecutive month. The institute's Production Index fell to 62% from 64.5% in January.

Other reports by Iphone Fresh

Discuss This Article