U.S. manufacturing activity grew at an accelerated rate in the month of February, according to a report released by the Institute for Supply Management on Monday.
The ISM said its manufacturing PMI rose to 60.8 in February from 58.7 in January, with a reading above 50 indicating growth in the manufacturing sector. Economists had expected the index to inch up to 58.8.
“Manufacturing performed well for the ninth straight month, with demand, consumption and inputs registering strong growth compared to January,” said Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee.
He added, “Labor-market difficulties at panelists’ companies and their suppliers continued to restrict manufacturing-economy expansion and will remain the primary headwind to production growth until employment levels and factory operations can return to normal across the entire supply chain.”
The bigger than expected increase by the headline index came as the new orders index jumped to 64.8 in February from 61.1 in January.
The production index also climbed to 63.2 in February from 60.7 in January, while the employment index rose to 54.4 from 52.6.
The report said the prices index also surged up to 86.0 in February from 82.1 in January, which Fiore said indicates “continued supplier pricing power and scarcity of supply chain goods.”
On Wednesday, the ISM is scheduled to release a separate report on activity in the service sector in the month of February. The services PMI is expected to come in unchanged at 58.7.