The February Manufacturing PMI registered 47.7%, 0.3 percentage point higher than the 47.4% recorded in January, according to the Institute for Supply Management (ISM) Manufacturing Business Survey Committee.

However, regarding the overall economy, this figure indicates a third month of contraction after a 30-month period of expansion. In the last two months, the Manufacturing PMI has been at its lowest levels since May 2020, when it registered 43.5%.

The New Orders Index remained in contraction territory at 47%, 4.5 percentage points higher than the figure of 42.5% recorded in January.

“The US manufacturing sector again contracted, with the Manufacturing PMI improving marginally over the previous month,” said Timothy R. Fiore, chair of the Institute for Supply Management (ISM) Manufacturing Business Survey Committee.

“With Business Survey Committee panellists reporting softening new order rates over the previous nine months, the February composite index reading reflects companies continuing to slow outputs to better match demand for the first half of 2023 and prepare for growth in the second half of the year.”

Of 18 manufacturing industries, six reported employment growth in February, with apparel recording the highest. However, the sector also recorded slower supplier deliveries and higher inventories.

Textile mills fared less well and were one of the 14 industries reporting a contraction in February. Declines were also recorded in new orders and production, while the industry also suffered from slower supplier deliveries, a contraction in inventories, and a drop in new export orders.

The textile industry did, however, report paying decreased prices for raw materials in February.

“New order rates remain sluggish due to buyer and supplier disagreements regarding price levels and delivery lead times; the index increase suggests progress in February,” Fiore continued. “Panellists’ companies continue to attempt to maintain head-count levels through the projected slow first half of the year in preparation for a stronger performance in the second half.”