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ISM Report: Manufacturing Contracts for 16th Consecutive Month

March 5, 2024
Eight out of 15 manufacturing industries reported growth last month.

Manufacturing economic activity contracted at a faster rate in February. Following the January figure of 49.1%, the highest reading in over a year, February’s Purchasing Manager’s Index registered 47.8%, down 1.3 points.

In comparison to the Manufacturing PMI, the Services PMI marked its 14th consecutive month of growth with a reading of 52.6%.

“Four out of five subindexes that directly factor into the Manufacturing PMI are in contraction territory, up from three in January,” said Timothy Fiore, chair of the ISM’s manufacturing business survey committee.

Both the new orders index and the production index moved into contraction territory after reporting growth in January, registering 49.2% and 48.4%, respectively. Anything lower than 50% represents contraction.

At 45.9 %, the employment index is contracting at a faster rate, down 1.2 points from January.

Three of the six biggest manufacturing industries registered growth last month: fabricated metal products; chemical products; and transportation equipment.

In the comments of the survey, multiple respondents noted increased sales; despite the faster rate of contraction, several panelists projected growth in the coming months.

“The month seems to be getting stronger with each passing day and week,” noted one respondent in the primary metals industry.

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