Manufacturing Activity Rose in February at Slowest Pace in a Year
U.S. manufacturing activity expanded at the slowest pace in a year in February as weaker growth abroad limited orders for American-made products, the Institute for Supply Management reported.
ISM’s monthly manufacturing index fell to 52.9, the lowest since January 2014, from 53.5 a month earlier, the Tempe, Arizona-based group reported March 2.
Readings above 50 indicate growth. The median forecast in a Bloomberg News survey of economists was 53.
A separate Commerce Department report issued March 2 said that U.S. construction spending fell 1.1% in January, a bigger drop than the 0.3% increase forecast by economists surveyed by Bloomberg.
The declines were led by 1.6% declines in public and private nonresidential construction, while private residential construction improved 0.6%.
Cutbacks in demand from overseas customers and domestic energy producers led to the weakest growth in new orders since May 2013, prompting U.S. factories to slow the rate of hiring, ISM said in its manufacturing report.
“There’s probably a little bit of energy-related manufacturing of capital goods, and some global, weakness,” said Stuart Hoffman, chief economist at PNC Financial Services Group in Pittsburgh. “It’s a temporary setback for the national picture on manufacturing.”
Production of motor vehicles, appliances and electronics are helping to sustain orders and counter weakness in energy and capital goods, Hoffman said.
The ISM’s new orders index fell to 52.5 last month from 52.9 in January, while export orders slid to 48, the lowest since November 2012.
The factory employment index fell to 51.4, the lowest since June 2013, from 54.1 the prior month, while the production gauge cooled to 53.7 from 56.5.
The report also showed the gauge of factory inventories climbed in February to a four-month high. An index of prices paid held at 35, the lowest since April 2009.
