Subscribe to our free, weekly email newsletter!


Non-manufacturing activity in February hits highest level in a year, says ISM

By Jeff Berman, Group News Editor
March 05, 2013

The Institute for Supply Management (ISM) reported today that non-manufacturing activity in February hit its highest level in a year, with non-manufacturing activity growing for the 38th consecutive month.

In its monthly Non-Manufacturing Report on Business, the ISM reported that the index it uses to measure non-manufacturing growth—known as the NMI—was 56.0 in February, up 0.8 percent from January and above the 12-month average of 54.5. What’s more, the ISM said this is the highest NMI since hitting 57.3 in February 2012.

A reading above 50 represents growth. The PMI, the index on which the ISM’s Manufacturing Report on Business is based on, rose 1.1 percent to 54.2 in February.

The report’s four core metrics each remained in growth mode in February. Business Activity/Production was up 0.5 percent at 56.9, and New Orders were up 3.8 percent at 58.2, and Employment fell 0.3 percent at 57.2 but remained firmly in growth territory.

“The key metrics all were in the right place,” said Tony Nieves, chair of the ISM’s Non-Manufacturing Business Survey Committee, said in an interview.

February Supplier Deliveries—at 51.5—were 1.0 percent below January, with Inventories up 7.0 percent at 54.0. Prices, which have been mainly been driven by gains in petroleum and petroleum-based products, saw a 3.7 percent rise to 61.7. And Backlog of Order increased 5.5 percent to 54.5.

Nieves said the “perfect scenario” would be for Backlog of Orders to grow, coupled with Supplier Deliveries slowing, with other indices increasing.

“The theme of the day in the past and currently was how companies are doing more with less so therefore with order backlog and new orders up and employment on a positive trend, there does need to be a bigger gap between new orders and employment, because now there is very little separating the two,” he said. “In order for employment to stand on its own longer, there needs to be a larger gap there. The ideal scenario would be for employment to have an upward trend into the high 50s’/low 60s, with new orders in the low 60s. That would be sustainable.”

Comments in the report from ISM member respondents showed increasing signs of confidence in the economy.

A wholesale trade respondent pointed to February bouncing back to forecast levels, and a public administration respondent cited how the economy is picking up at a faster pace than previously projected.

“I think we are on the right track, but I like to see things trend out for a period of time,” explained Nieves. “As we approach the end of the first quarter, things are boding well so far. It is better than anticipated. I have said before that February and March are pivotal months as we get past the lull of post-holiday and get into the swing of things and get a better idea of how things are starting to look heading into summer.”

About the Author

Jeff Berman headshot
Jeff Berman
Group News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

The PMI, the ISM’s index to measure growth, increased 1.8 percent to 57.1 in July. This is 1.8 percent higher than the 12-month average of 55.3. The PMI has grown in 18 of the last 20 months, with economic activity in the manufacturing sector expanding for the last 14 months as the overall economy was up for the 62nd consecutive month.

YRC Worldwide, whose regional and long-haul units provide the second-largest LTL capacity in the trucking industry, narrowed its second-quarter loss to $4.9 million on $1.32 billion revenue, compared with $15.1 million loss on $1.24 billion revenue in the year-ago quarter.

With NFL training camps in full swing, it stands to reason that Congress must be replete with football fans, given how it basically has elected to punt on federal transportation funding yet again, with the Senate yesterday signing off on a ten-month bill to keep federal surface transportation funding intact through May 2015 through a nearly $11 billion stopgap measure.

Carload volumes were up 4.3 percent at 306,988, and intermodal volume for the week ending July 26 was up 3.3 percent at 264,809

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA