Board Converting News, March 15, 2021

ISM: Manufacturing Grows Again In February, As Does Economy Economic activity in the manufacturing sector grew in Feb- ruary, with the overall economy notching a ninth consecu- tive month of growth, say the nation’s supply executives in the latest Manufacturing ISM Report On Business. The report was issued by Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management (ISM) Manufacturing Business Survey Committee: “The February Manufacturing PMI registered 60.8 per- cent, an increase of 2.1 percentage points from the Janu- ary reading of 58.7 percent. This figure indicates expan- sion in the overall economy for the ninth month in a row after contraction in March, April, and May. The New Orders Index registered 64.8 percent, up 3.7 percentage points from the January reading of 61.1 percent.

“The Production Index registered 63.2 percent, an in- crease of 2.5 percentage points compared to the Janu- ary reading of 60.7 percent. The Backlog of Orders Index registered 64 percent, 4.3 percentage points above the January reading of 59.7 percent. The Employment Index registered 54.4 percent, 1.8 percentage points higher from the January reading of 52.6 percent. The Supplier Deliver- ies Index registered 72 percent, up 3.8 percentage points from the January figure of 68.2 percent. “The Inventories Index registered 49.7 percent, 1.1 per- centage points lower than the January reading of 50.8 percent. The Prices Index registered 86 percent, up 3.9 percentage points compared to the January reading of 82.1 percent. The New Export Orders Index registered 57.2 percent, an increase of 2.3 percentage points compared to the January reading of 54.9 percent. The Imports Index registered 56.1 percent, a 0.7 percentage point decrease from the January reading of 56.8 percent.”

“The manufacturing economy continued recovering in February. Committee mem- bers reported that their companies and suppliers continue to operate in reconfig- ured factories. Issues with absenteeism, short-term shutdowns to sanitize facilities, and hiring workers remain challenges and continue to cause strains that limit manu- facturing-growth potential. Optimistic panel sentiment increased, with five positive com- ments for every cautious comment, com- pared to a 3-to-1 ratio in January. “Demand expanded, with the (1) New Orders Index growing at a strong level, supported by the New Export Orders Index expanding at a faster rate, (2) Customers’ Inventories Index remaining in ‘too low’ territory (at 32.5 percent, tying its all-time low), and the (3) Backlog of Orders Index growing 4.3 percentage points compared to January. “Consumption (measured by the Pro- duction and Employment indexes) contrib- uted positively (a combined 4.3-percentage point increase) to the Manufacturing PMI- calculation. Five of the top six industries re- ported moderate to strong expansion. “The Employment Index expanded for the third straight month, but panelists con- tinue to note significant difficulties in attract- ing and retaining labor at their companies and supplier facilities. Inputs — expressed as supplier deliveries, inventories and im- ports — continued to indicate input-driv- en constraints to production expansion, at higher rates compared to January, as indi- cated by the Inventories Index returning to contraction territory and another month of



March 15, 2021

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