The New York City skyline in the United States

United States PMI February 2020

United States: ISM manufacturing index edges down in February

The Institute for Supply Management (ISM) manufacturing index ticked down to 50.1 in February from its seven-month high of 50.9 in January, and was worse than market expectations of a fall to 50.4. Consequently, the index remained just a hair above the 50-threshold that separates expansion from contraction in the sector.

The downturn in February came amid global supply chain disruptions stemming from the coronavirus outbreak in China, which have impacted most of the domestic manufacturing sectors. Consequently, production faltered notably in the month, while demand waned. Output expanded in only two of the top six industries in the month. Meanwhile, persistent issues at Boeing related to its MAX 737 jets have been a particular drag for the transportation equipment sector. On a brighter note, new export orders continued to expand in February, albeit at a softer pace, while the contraction in employment weakened in the month. In light of supply-side constraints, outstanding business rose for the first time after declining for nine consecutive months.

Turning to the supply side, supplier delivery times slowed to the greatest extend in 15 months in February, linked to delays caused by the coronavirus outbreak. Consequently, inventories fell at a sharper rate, hitting a five-month low.

The ISM prices sub-index fell sharply in February, indicating raw material prices declined, largely due to falling base metals and natural gas prices.

Comments from ISM respondents highlight the virus’ impact, as one panelist puts it, “There are always supply chain challenges with Lunar New Year shutdowns, and this year is no different. Coronavirus is wreaking havoc on the electronics industry. […] It’s a mad dash to dual source stateside in case China isn’t back online soon.” 

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest