The Institute for Supply Management reports that their PMI index of manufacturing activity was 52.4 in February, down from 54.1 in January.  An index number greater than 50 indicates that there is growth in manufacturing activity.  The 20-year average for the PMI index is 52.1, so the February 2012 index, at 52.4 is at little better than average. Particularly encouraging, is the continued strong showing for manufacturing employment and export growth.

February’s report reinforces the view that manufacturing is growing faster than the economy as a whole. Growth in factory output is benefiting from pent up demand for durable goods (principally motor vehicles), relatively high factory utilization creating the need for business equipment replacement and capacity expanding investment, and a competitive exchange rate remains conducive for exports.