February 2016 ISM Manufacturing Survey Remains In Contraction For The Fifth Month In A Row

The ISM Manufacturing survey was in contraction for the fifth month in a row. The key internals were mixed. The PMI manufacturing Index, also released today, is in expansion.

The ISM Manufacturing survey index (PMI) marginally improved from 48.2 to 49.5 (50 separates manufacturing contraction and expansion). This was at expectations which were 47.2 to 49.5 (consensus 48.5).

Earlier today, the PMI Manufacturing Index was released – from Bloomberg:

Released On 3/1/2016 9:45:00 AM For Feb, 2016

	Prior	Consensus	Consensus Range	Actual
Level	52.4	51.3	51.0 to 51.7	51.3

Highlights
Growth in Markit Economics’ manufacturing sample is slowing to a crawl, at 51.3 for final February which is, next only to February’s flash of 51.0, the second lowest reading since October 2012. January, at 52.4, was a good month for the manufacturing sector with industrial production up and durable orders up, but the early indications on February are uniformly negative.

Production in this report slowed as did new orders where growth is at a 3-1/2 year low. Export orders fell the most since April last year. Backlog orders are also down and employment growth moderated for a second straight month. Respondents in the sample are citing caution among their customers as a key negative. In a convincing kicker, selling prices are down the most in more than 3-1/2 years.

This report, which runs hot compared to other manufacturing reports, is sitting near recovery lows and is offering its own signal of renewed trouble for manufacturing, a sector that continues to get hit by weak exports and weak energy-related demand.

The regional Fed manufacturing surveys indicated little growth or contraction in February, and now the ISM indicates manufacturing shows contraction.