The manufacturing sector grew for the 21st consecutive month in February, albeit at a slower pace, a private research group reported Tuesday, affirming a rebound in activity at the nations’ factories.
The Institute for Supply Management said that its index measuring manufacturing activity declined to 55.3 in February, from a revised reading of 56.4 in January. The February figure was below the reading of 57 anticipated by analysts.
Although the index declined, the fact that it remained above 50 indicates that the sector continued to grow last month but at a slower pace. A reading of 50 or above in the index means the manufacturing sector is expanding, while a figure below 50 represents a contraction.
The manufacturing data from ISM is watched closely by economists and investors because it offers the first comprehensive look at factory activity for the prior month.
Norbert J. Ore, chairman of the institute’s survey committee, said the February index reflects continued strength in manufacturing.
“While the overall rate of growth is slowing, the overall picture is improving as price increases and shortages are becoming less of a problem,” Ore said. “Exports and imports remain strong.”
The Tempe, Ariz.-based ISM said its index measuring production decreased to 56.7 in February from 57.8. A separate index gauging employment fell to 57.4 from 58.1 in January.
The group’s measure of new orders declined to 55.8 from 56.5 the previous month. In addition, ISM’s index of prices paid by manufacturers declined to 65.5 from 69 in January, showing some easing in the pace of increases in prices for the materials they use.
Overall, of the 20 manufacturing sectors surveyed by the group, 13 reported growth. They include apparel, textiles, miscellaneous, transportation and equipment, electronic components and equipment, tobacco, chemicals, industrial and commercial equipment and products, and paper.