Employment
ISM^®'s Employment Index registered 46.9 percent in February, an increase of 0.3 percentage point compared to the January reading of 46.6 percent. "This is the seventh month of employment contraction, but at a slower rate compared to January. Among the six big industry sectors, two expanded and four contracted. Panelist comments were generally cautious regarding future employment potential," says Fiore. An Employment Index above 50.8 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) data on manufacturing employment.

Of the 18 manufacturing industries, three reported employment growth in February: Food, Beverage & Tobacco Products; Plastics & Rubber Products; and Computer & Electronic Products. The nine industries reporting a decrease in employment in February, in the following order, are: Petroleum & Coal Products; Paper Products; Primary Metals; Textile Mills; Transportation Equipment; Machinery; Miscellaneous Manufacturing; Fabricated Metal Products; and Chemical Products. Six industries reported no change in February compared to January.

Supplier Deliveries^�nbsp;
The delivery performance of suppliers to manufacturing organizations was slower in February, as the Supplier Deliveries Index registered 57.3 percent. This is 4.4 percentage points higher than the 52.9 percent reported for January. "Suppliers continue to struggle to deliver, at a stronger rate compared to January. The index reached its highest level since November 2018, when it registered 61 percent. Lead times are generally stable. Concerns about current and ongoing reliable Asian supply dominated the comments from panelists," says Fiore. A reading below 50 percent indicates faster deliveries, while a reading above 50 percent indicates slower deliveries.

The 13 industries reporting slower supplier deliveries in February — listed in order — are: Textile Mills; Apparel, Leather & Allied Products; Computer & Electronic Products; Chemical Products; Furniture & Related Products; Electrical Equipment, Appliances & Components; Paper Products; Nonmetallic Mineral Products; Miscellaneous Manufacturing; Transportation Equipment; Fabricated Metal Products; Food, Beverage & Tobacco Products; and Machinery. The only industry reporting faster supplier deliveries in February is Primary Metals.

Inventories
The Inventories Index registered 46.5 percent in February, a 2.3-percentage point decrease from the 48.8 percent reported for January. "The index contracted for a ninth straight month at a faster rate, and reaching its lowest level since September 2019, when it registered 46.3 percent. Inventories are expected to grow as disruptions in the supply chain lead to inefficiencies in material conversion," says Fiore. An Inventories Index greater than 44.3 percent, over time, is generally consistent with expansion in the Bureau of Economic Analysis (BEA) figures on overall manufacturing inventories (in chained 2000 dollars ).