US Manufacturing Showed Signs of Rebounding in February

After reporting some contraction over the last five months, US manufacturing activity in February showed signs of a bounce back in the most recent ISM Manufacturing index. “Brad Holcomb, chair of the ISM Manufacturing Survey Business Committee, said in an interview that while new orders were flat, the fact that it is still showing growth is good for the manufacturing sector, adding that 12 of 18 manufacturing sectors said new orders were growing, with only four reporting a decrease and is an improvement compared to January.” The ISM also noted the overall economy has seen growth for 81 months in a row.  Holcomb commented that “inventories have been contracting for eight consecutive months… Heading into last December that was a clear strategy. Now we are two months into 2016, and it is still low, which represents some conservatism in carrying lean inventories. The difference between the 51.5 in new orders and 45.0 in inventories is 6.5, which is good and it suggest we don’t have enough inventory to sustain this level of new orders and production and is likely to go up.”  The stock market seems to be regaining some of its recent losses.  That stabilization is a somewhat positive indicator for the second half of 2016.  This was reflected in a 2.6% increase in employment among US manufacturers in February.


Bruce Peacock
Vice President of Business Development               
The Richmond Group USA