Following last month's massive miss on US manufacturing, ISM modestly beat excpectations today (53.2 vs 52.3 exp.) but remains near 8 months lows. This is still the largest 2-month drop since August 2011. New orders rose but production plunged and employment was unchanged as inventories surged. Respondents fell back on blaming the weather with "conservative optimism" a standout. In addition, construction spending beat expectations in January (and December) so it seems the weather did not affect that?
ISM Manufacturing bounced off January's collapse...
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and the breakdown:
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What the respondents said:
- "Cold weather is having a negative impact on our business (garment). Orders are down." (Apparel, Leather & Allied Products)
- "Continue to have trouble finding qualified CNC machinists. Desperately trying to hire CNC programmers." (Fabricated Metal Products)
- "Bad weather hampering logistics across the country." (Petroleum & Coal Products)
- "Higher than normal demand for this time of year." (Transportation Equipment)
- "Very strong month in terms of growth." (Computer & Electronic Products)
- "Many raw material disruptions due to weather and back-ups at the ports." (Chemical Products)
- "We are seeing competition heat-up this year." (Plastics & Rubber Products)
- "Slow January, but February orders are picking-up." (Food, Beverage & Tobacco Products)
- "Conservative optimism re-kindling. Steady as it goes." (Machinery)
- "Business continues to be stronger. Was at the KBIS/IBS show last week, and the feeling was much the same. Good last year and this year shows great promise." (Furniture & Related Products)