As the Institute for Supply Management reported Wednesday that its Purchasing Managers Index for manufacturing rose 1.9 percent in February to 56.7 percent, National Association of Manufacturers economist Chi Nguyen noted that the "healthy gain" reversed a three-month trend when manufacturing activity measured by the index was cooling.
"The manufacturing sector obviously heated up a bit in February, and that's good news," she said. "PMI's indices for both new orders and manufacturing employment were also up 3.9 percent and 3.7 percent, respectively, and that bodes well for a nice finish for the first quarter and a solid start to the second.
"Manufacturing's steady recovery appears to be staying on track as this is the 33rd consecutive month that the manufacturing index has stayed above 50," Nguyen said, explaining that an index above 50 indicates growth within the manufacturing sector. An index below 50 indicates contraction. The manufacturing employment index, in particular, offers hope that this month's employment numbers from the Labor Department may include some welcomed news of factory job creation. But consumer confidence was significantly down last month and energy prices continue to take a toll on the overall economy, so manufacturing's uphill struggle will continue for a while before anyone decides to celebrate."
