US ISM manufacturing index dropped to 54.2 in February, down from 56.6, missed expectation of 56.0. Looking at the details, new orders dropped -2.8 to 55.5. Production dropped -5.7 to 54.8. Employment dropped -3.2 to 52.3. Prices dropped -0.2 to 49.4.
ISM noted that:
- Comments from the panel reflect continued expanding business strength, supported by notable demand and output, although both were softer than the prior month.
- Demand expansion continued, with the New Orders Index reaching the mid-50s, the Customers’ Inventories Index scoring lower and remaining too low, and the Backlog of Orders returning to a low-50s expansion level.
- Consumption (production and employment) continued to expand but fell a combined 8.9 points from the previous month’s levels.
- Inputs — expressed as supplier deliveries, inventories and imports — stabilized at a mid-50s level and had a slight negative impact on the PMI®. Inputs continue to reflect an easing business environment, confirmed by Prices Index contraction.
- Exports continue to expand, at slightly stronger rates compared to January. The manufacturing sector continues to expand, but inputs and prices indicate easing of supply chain constraints.
