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Manufacturing Sector Expanded in February

02 March 2018

The report showed that out of the 31 subsectors surveyed, 21 recorded growth in February, down from 29 subsectors that recorded growth out of the 34 subsectors surveyed in January.

New orders actually increased at a slower pace than in January, but the brisk pace led to an increase in backlogs, the Institute for Supply Management said.

ISM's monthly Purchasing Manufacturer's Index rose 1.7 points to 60.8 per cent, the highest level since May 2004, indicating growth for the 18th consecutive month.

"Production expansion continues, in spite of labour, capacity constraints and supplier delivery difficulties", Timothy Fiore, chair of ISM's Manufacturing Business Survey Committee, said in a statement.

The rise in the index came despite a slowing in growth for new orders and production, two major parts of the PMI. They included primary metals, machinery, petroleum and coal products, fabricated metal products, transportation equipment and miscellaneous manufacturing.

The Manufacturing PMI dropped for the second consecutive month to 56.3 percent, from a peak of 59.3 percent recorded in December.

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Overall, manufacturing's continued growth makes February 2018 the 17th consecutive month of growth in the manufacturing sector.

All seven activity sub-indexes in the Australian PMI expanded in February, marking the fourth such consecutive month.

February proved to be another strong month for manufacturing, with the Australian Performance of Manufacturing Index continuing to show strong growth.

ISM's Employment Index advanced to 59.7%, up from 54.2% in January.

The Production Index registered 62%, a 2.5 percentage point decrease compared to the January reading of 64.5%. Two industries reported contraction during the period: apparel, leather & allied products; and furniture & related products.

"Expansion over 60 (%) is really strong", Fiore said.

Manufacturing Sector Expanded in February