The ISM manufacturing index increased 1.3 to 49.5, which is still a contraction. However, the internals were hopeful. New orders were 51.5; production increased 2.6 to 52.8 and employment rose 2.6 to 48.5. But new export orders decreased.  The anecdotal comments provided the best news:

  • “Low oil prices and reduced activity continue affecting our business.” (Petroleum & Coal Products)
  • “U.S. business demand is solid; international demand is soft.” (Chemical Products)
  • Mobility spend is up.” (Computer & Electronic Products)
  • “Business has to get better. And it appears it is. Healthy backlog for 2016.” (Fabricated Metal Products)
  • “Very strong demand for product. Material availability very good and commodity pricing continues to be depressed.” (Machinery)
  • “Airlines are still ordering planes and spare parts for plane galleys.”(Transportation Equipment)
  • “Market is beginning to trend up with spring season on its way.” (Wood Products)
  • “Not seeing impact from global economic volatility or oil prices. Business is strong and growth projections remain the same.” (Miscellaneous Manufacturing)
  • “Orders are coming in stronger than expected.” (Furniture & Related Products)
  • “Still a bit sluggish.” (Food, Beverage & Tobacco Products) 
  • With the exception of comments related to the oil market and a few points about international softness, the comments are positive.  Hopefully, this will translate to a reading above 50 in the next few months.

    The service sector is still increasing; the ISM services number decreased .1 to 53.4. The report contained mixed internals. While the 3.9 point jump in production and 8 point increase in new orders were positive, employment slid into negative territory with a 49.7 reading. In contrast with the manufacturing report, the anecdotal comments were a bit more mixed: