ISM Shows More Slowing Manufacturing Growth

The New Orders Index fell by 0.4 points to 52.5%, and the Production Index fell 2.8 points to 53.7%. The Employment Index also fell by 2.7 points to 51.4%.

Inventories of raw materials rose by 1.5 points to 52.5%, while the Prices Index was flat at 35%.

Comments from the panel express a growing level of concern over the West Coast dock slowdown, negatively affecting exports and imports and requiring workarounds and added costs.

Of the 18 manufacturing industries, 12 showed growth in February in the following order: Paper Products; Printing & Related Support Activities; Furniture & Related Products; Primary Metals; Nonmetallic Mineral Products; Food, Beverage & Tobacco Products; Miscellaneous Manufacturing; Fabricated Metal Products; Machinery; Transportation Equipment; Electrical Equipment, Appliances & Components; and Chemical Products. Three of the 18 industries reporting contraction were as follows: Textile Mills; Apparel, Leather & Allied Products; and Computer & Electronic Products.

ALSO READ: GDP Revision Lower but Still Better Than Expected

Our take is that it seems hard to imagine that the West Coast port shutdown is the sole reason for this ever lower growth. Another quote cited that lower oil and natural gas prices continue to put pressure on revenues. This may be slower growth, but it is still at least growth.