February 2020 Manufacturing ISM Report On Business Reports Second Straight Month of Production Growth

Author photo: Steve Clouther
BySteve Clouther
Category:
Industry Trends

The Manufacturing ISM Report On Business is published monthly by the Institute for Supply Management (ISM), the largest supply management organization in the world, as well as one of the most respected.  Economic activity in the manufacturing sector grew in February, and the overall economy grew for the 130th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report On Business.

February Manufacturing ISM Report

Manufacturing expanded in February, but at a slower rate as the PMI registered 50.1 percent, a 0.8-percentage point decrease from the January reading of 50.9 percent.

ISM’s New Orders Index registered 49.8 percent in February, a decrease of 2.2 percentage points when compared to the 52 percent reported for January.  This indicates that new orders contracted after growing in January.

ISM’s Production Index registered 50.3 percent in February, 4 percentage points lower than the 54.3 percent reported for January, registering two months of growth following five consecutive months of contraction.

ISM’s Employment Index registered 46.9 percent in February, an increase of 0.3 percentage point compared to the January reading of 46.6 percent.  This is the seventh month of employment contraction, but at a slower rate compared to January.

The delivery performance of suppliers to manufacturing organizations was slower in February, as the Supplier Deliveries Index registered 57.3 percent.  This is 4.4 percentage points higher than the 52.9 percent reported for January.

The Inventories Index registered 46.5 percent in February, a 2.3-percentage point decrease from the 48.8 percent reported for January.  The index contracted for a ninth straight month at a faster rate, and reaching its lowest level since September 2019, when it registered 46.3 percent.

ISM’s Backlog of Orders Index registered 50.3 percent in February, 4.6 percentage points higher than the 45.7 percent reported in January, indicating order backlogs grew after contracting for nine consecutive months.  Backlog growth is supported by suppliers having trouble delivering materials to support production.

Of the 18 manufacturing industries, the 14 that reported growth in February — listed in order — are: Wood Products; Furniture & Related Products; Plastics & Rubber Products; Printing & Related Support Activities; Paper Products; Textile Mills; Primary Metals; Food, Beverage & Tobacco Products; Computer & Electronic Products; Miscellaneous Manufacturing; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Machinery; and Chemical Products.  The three industries reporting contraction in February are: Petroleum & Coal Products; Transportation Equipment; and Nonmetallic Mineral Products.

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