Manufacturing Grows After Eight-Month Decline

After eight straight months of decline, economic activity in the U.S. manufacturing sector rebounded during February, says the latest Manufacturing NAPM (National Assn. of Purchasing Management) Report on Business. "Both production and new orders made solid gains while new export orders vaulted over the break-even line (index of 50) for the first time since November 1997," says Norbert Ore, chair of the NAPM Manufacturing Business Survey Committee. Still, Ore expresses concern over persistent price softness and declining commitment leadtimes for capital expenditures. NAPM's Purchasing Manager's Index (PMI) for February was 52.4%, up from 49.5% in January. A PMI reading above 50% shows manufacturing is "generally expanding," says NAPM; below 50% signifies "generally contracting." The PMI is a composite of five indexes: new orders, which rose 5.9% to 57.2% in February; production, up 3.8% to 56.9%; supplier deliveries, still somewhat slow falling 0.3% to 50.6%; inventories, liquidating slower as the index rose 1.9% to 44.2%; and employment, up 0.2% to 45%.