manufacturing activity jumped in February to its highest level
since June 2011 amid a strong rise in new orders, order
backlogs, and exports and imports.
The Institute for Supply
Managements Purchasing Managers Index (PMI) rose to
54.2 for the month, up 1.1 percentage points from
Januarys reading of 53.1.
Monthly gains were also recorded
in the index for new orders, up 4.5 percentage points to 57.8;
backlog of orders, up 7.5 percentage points to 55; exports, up
3 percentage points to 53.5; and imports, up 4 percentage
points to 54.
While the employment and
customer inventories indices fell month on month, the pricing
index climbed 5 percentage points to 61.5 percent in the same
comparison. Prices rose for such commodities as aluminum,
copper, fuel and steel productsespecially bar, which some
buyers reported being in short supply. However, hot-rolled
sheet prices fell, the survey found.
Primary metals producers and
fabricators reported growth during February. Our "workload is
growing, (and we need) more qualified machinists," one
fabricator respondent said.
At the same time, producers and
fabricators reported growth in new orders, order backlogs,
production and hiring. Fabricators increased inventories, but
producers reduced them. Primary metals producers said their
customers inventories were too high, while fabricators
believed they were too low.
Fabricators paid higher prices
in February, but metal producers input pricing was
Producers said their new export
orders fell last month, as did imports. Fabricators saw an
increase in both new export orders and imports.
Respondents to the Chicago
chapters monthly survey suggested some strength is
building this quarter. "Sales orders are up, and February
through the end of March is looking good," one purchasing
"By the end of January, we
became inundated with new orders. ... It appears that we will
be busy throughout (the) first quarter. We will also be hiring
new welders to assist with capacity," a second ISM member
"With fiscal drag hanging over
its head, the U.S. manufacturing sector does not have clear
sailing (ahead), but Februarys reading is its healthiest
in a long time," Michael Montgomery, a senior economist at
Lexington, Mass.-based IHS Global Insight Inc., said.
The PMIs "strength was
right where you want it, with higher orders, output,
inventories and exports," he said. "This is the ideal mix (that
creates) the recipe for much faster growth."