More surveys of manufacturers show continued strength and growth, making it appear that 2013 is off to a strong start. The latest Manufacturing Report on Business from the Institute for Supply Management (ISM) underscores this in a big way. The Purchasing Managers Index (PMI) registered 54.2% for February, an increase of 1.1% from January’s reading of 53.1%, indicating an expansion in manufacturing for the third consecutive month. (A reading above 50 is considered an expansion, while a reading below is a contraction.)
“This month’s reading reflects the highest PMI since June 2011, when the index registered 55.8%,” said Bradley J. Holcomb, CPSM, CPSD, chair of the ISM Manufacturing Business Survey Committee.
New orders ticked up nicely by 4.5% to 57.8% in February, showing growth in that category for the second consecutive month. All five of the PMI’s component indexes—new orders, production, employment, supplier deliveries and inventories—registered in positive territory in February. Customers’ inventories remain “too low,” dropping to 46.5% in February from 48.5% in January....