“Manufacturing expanded in February, as the PMI® registered 50.1 percent, a 0.8-percentage point decrease from the January reading of 50.9 percent. “The PMI® expanded in February, but at a slower rate. Four of the big six industries expanded, at similar rates compared to January. Four of the PMI®’s 10 subindexes recorded expansion, down from six the previous month,” says Fiore.
A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.
A PMI® above 42.8 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the February PMI® indicates growth for the 130th consecutive month in the overall economy, and the second month of growth following five months of contraction in the manufacturing sector. “The past relationship between the PMI® and the overall economy indicates that the PMI® for February (50.1 percent) corresponds to a 2.1-percent increase in real gross domestic product (GDP) on an annualized basis,” -Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee
The industry is currently facing challenges from supply change disruption due to coronavirus outbreak and continued Boeing 737 Max delays.
The low but still positive PMI in February corresponds to a 2.1-percent increase in GDP according to ISM.
This February PMI® indicates growth for the 130th consecutive month in the overall economy, and the second month of growth following five months of contraction in the manufacturing sector.
Could certainly be worse!
Graph: Calculated Risk Blog