The manufacturing slump may be easing, as new orders for goods expanded in February.
The Institute for Supply Management’s index rose to 49.5, the highest since September, from 48.2 in January. The reading, which beat analysts’ consensus estimate of 48.5, was just shy of 50, the dividing line between contraction and expansion.
Headwinds — including soft overseas markets, a strengthening U.S. dollar, weakness in the oil sector, and a buildup in inventories — could be starting to fade, according to Bloomberg. At the same time domestic demand for industrial goods is showing signs of increasing strength amid rising job and wage growth.
Bradley Holcomb, chairman of the ISM’s factory survey, said in a conference call that manufacturing might have found “a bottom and a turning point,” reported Bloomberg.
At least half of the 18 industries tracked by the ISM expanded in February — the first time since August. Top performers included makers of wood products, textiles, furniture, and chemicals. The new orders gauge last month was 51.5, matching the January reading as the highest since August. The production measure climbed to 52.8, a six-month high, from 50.2 in January.
Employment, inventories, and backlog of orders all improved but remained below the 50 mark.
The ISM report collaborates other recent reports, including data published last week that showed orders for capital equipment jumped in January after plunging to a more than two-year low at the end of 2015, Bloomberg said. Separately, earlier this month the Federal Reserve said that factory output rose in January by the most in six months.