Those who watch the manufacturing industry are well aware of the ups and downs of the past two months. That is also reflected in several reports out on the economy of manufacturing. The Institute for Supply Management's February 2015 Manufacturing ISM Report on Business shows that economic activity in that sector expanded in February for the 26th consecutive month. However, before we get too excited, the Purchasing Management Index (PMI) actually dropped from 53.5% in January to 52.9% in February, meaning manufacturing basically flat-lined last month.
Of the 18 manufacturing industries tracked by ISM, 12 reported growth in February, down from 15 industries reporting growth in January. There was no mention of where plastics and rubber products stood. The plastic processing industry is affected by the price of oil in both positive and negative ways. Resin-based products as well as HDPE, LDPE, PET and PP are showing declines in price. While that might sound like good news, one plastics industry respondent to ISM's February survey commented, "Customer behavior is being negatively impacted by ongoing resin price decreases. Order placement being delayed to receive lower finished good pricing."
That may account for the flat-lining of the New Orders Index, as well, with new orders dropping from 52.9% in January to 52.5% in February. Production also dropped in February to 53.7% from 56.5% in January. Employment dipped to 51.4% in February from January's figure of 54.1%.