After a slow Q4, data from the Institute for Supply Management shows manufacturing stabilized in February and production accelerated—signaling we may be through the worst of the manufacturing downturn.
The ISM said its index of national factory activity climbed 130 bps to 49.5 last month, the second month in a row the index increased.
We’re not out of the woods yet, though. Anything under 50 on the index indicates a contraction in manufacturing. The US has been under 50 for the past five months, undercut by weak global demand, a strong dollar and crude oil’s collapse, Reuters reports.
Still, the numbers should put doom-saying moguls like Sam Zell and George Soros at ease. Steve Blitz, chief economist at ITG Investment Research, says that while the index doesn’t show a manufacturing boom, it also doesn’t “support the notion of an economy slipping into recession.” [Reuters]
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