The Institute for Supply Management February 2009 Manufacturing ISM Report On Business® shows “Economic activity in the manufacturing sector failed to grow in February for the 13th consecutive month, and the overall economy contracted for the fifth consecutive month.”
Manufacturing At A Glance
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Manufacturing contracted in February as the PMI registered 35.8 percent, which is 0.2 percentage point higher than the 35.6 percent reported in January. This is the 13th consecutive month of contraction in the manufacturing sector. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.
A PMI in excess of 41.2 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the PMI indicates contraction in both the overall economy and the manufacturing sector.
In February, none of the 18 manufacturing industries reported paying higher prices.
Although inventories are rapidly shrinking, new orders are shrinking even faster. Note that customer inventories are still rising. Thus, further cutbacks in production are necessary and prices will remain under pressure.
There are many other charts in the report. Please take a look.
Mike “Mish” Shedlock
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