The rebounding manufacturing sector grew for seventh consecutive month in February, but at a slower clip than expected, according to The Institute for Supply Management (ISM).
The ISM said its manufacturing index, also known as the purchasing managers' index, slowed to 56.5% in February, from 58.4% in January.
Any number above 50% indicates growth. The figure was slightly lower than the 58% expected by most market watchers.
New manufacturing orders slipped 6.4 percentage points compared with January.
"The severe winter weather along the East Coast and Toyota's production shutdowns undoubtedly had a negative impact on manufacturing production in February. According to the ISM report, the adverse events last month were offset by on-going improvement in economic activity and the inventory swing that occurs when firms have to slow their destocking, and eventually build stocks, due to continuing growth in orders," said Daniel J. Meckstroth, Chief Economist for the Manufacturers Alliance/MAPI.
"Relatively small fluctuations in the indexes are normal for the indicator since there is a clearly discernable growth trend in the data," he added.
For the third consecutive month there was an improvement in the employment outlook, it was up 2.8 percentage points for the month to 56.1%.
"Manufacturing is not known as being a sector that generates many jobs quickly in a recovery. The employment indicator may be signaling that job cuts were overdone broadly and the labor market will shortly starting improving," said Meckstroth.
ISM concurred on labor market improvement. "Manufacturers are seemingly willing to hire where they have orders to support higher employmen," ISM said
Copyright Agence France-Presse, 2010
