Daily Management Review

U.S. Manufacturing Growth Slows Down In February


03/15/2019




U.S. Manufacturing Growth Slows Down In February
The US economy reported a slowdown in manufacturing in February, 2019 because of a slowdown in growth of new orders and amidst rising concerns among managers of increasing commodity prices.  This was the second straight month of drop in U.S. manufacturing output fell
 
There was a slowdown new orders, employment, inventories and exports even though February was the 20th straight month that the US manufacturing showed growth, al bet it slower than that of January.
 
The US Purchasing Managers Index fell to still-strong 61.2 per cent in February from January's reading of 61.4 per cent, according to data from the Institute of Supply Management.
 
"An index value above 50 signals that manufacturing activity is growing, but a value of 60 or more is rare," said Daniel Meckstroth, chief economist for the Manufacturers Alliance/MAPI. " In the last 25 years, the monthly PMI index has been 60 or higher only 4%t of the time. Manufacturing is clearly growing at a solid pace led by pent-up demand for consumer durables such as motor vehicles and business equipment, including high-tech.”
 
"Today's report from the U.S. Department of Labor that manufacturing employment increased by 17,000 in March confirms the direction of these early indicators," he added.
 
"Manufacturing activity was robust last month. The reports of widespread price increases across metals and oil-related commodities indicates that not only is U.S. manufacturing activity increasing rapidly but there is strong industrial growth around the world, particularly in the developing countries."
 
The data, along with some earlier weak economic data from the economy, also underscored the patient stance that the US Federal Reserve has taken about further rate hikes this year  The U.S. central bank raised rates four times last year.
 
Drop in manufacturing of declines in the output of motor vehicles, machinery and furniture, resulted in the 0.4 per cent drop in manufacturing activity in February. There had been a revision in the data from January where it was propped up to indicate a drop ion manufacturing activity by 0.5 per cent instead of the earlier number of a drop of 0.9 per cent.
 
Following a drop of 7.6 per cent in January, there was a further 0.7 per cent drop in February in manufacturing activity of motor vehicles and parts. In February,  manufacturing output fell 0.4 per cent excluding motor vehicles and parts.
 
A drop of 5.1 points in February to touch 3.7 points,  in the general business conditions index was reported by the New York Fed in a separate report on Friday. This February was the third consecutive month when the monthly reading came to at below 10, which according to the New York Fed, suggested “that growth has remained quite a bit slower so far this year than it was for most of 2018.”
 
According to a report by the Institute for Supply Management (ISM) earlier this month, there was a drop in the measure of national manufacturing activity to touch a over two-year low in February. This was because of a very significant drop in the new orders component.
 
(Source:www.industryweek.com & www.reuters.com)






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