News provided by
Institute for Supply Management
Feb 03, 2025, 10:00 ET

(Tempe, Arizona) — Economic activity in the manufacturing sector expanded for the second month in a row in February after 26 consecutive months of contraction, say the nation’s supply executives in the latest Manufacturing ISM® Report On Business®.

Manufacturing PMI®

The U.S. manufacturing sector expanded for the second consecutive month in February after 26 months of contraction, as the Manufacturing PMI® registered 50.3 percent, 0.6 percentage point lower compared to the 50.9 percent reported in January. “Although the PMI® took a step back in February, it increased by four percentage points over the three previous months, with the most recent bump in January finally returning the manufacturing sector to expansion. Of the five subindexes that directly factor into the Manufacturing PMI®, two (Production and Supplier Deliveries) were in expansion territory, compared to four in January. Both the Employment and the New Orders indexes returned to contraction. Of the six biggest manufacturing industries, four (Petroleum & Coal Products; Food, Beverage & Tobacco Products; Chemical Products; and Transportation Equipment) registered growth,” says Fiore. A reading above 50 percent indicates that the manufacturing sector is generally expanding; below 50 percent indicates that it is generally contracting.

A Manufacturing PMI® above 42.3 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the February Manufacturing PMI® indicates the overall economy grew for the 58th straight month after last contracting in April 2020. “The past relationship between the Manufacturing PMI® and the overall economy indicates that the February reading (50.3 percent) corresponds to a change of plus-2.2 percent in real gross domestic product (GDP) on an annualized basis,” says Fiore.

2-25 ISM MFG PMI 50.3

 

SOURCE: ISM

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