best website builder As the U.S. hits the 1-year mark since the Covid-19 pandemic began to truly leave its impact, many industries still find themselves struggling to recover. However, one sector which was hit especially hard initially, the manufacturing sector, has begun to show signs of recovery. The Manufacturing Report on Business from the Institute for Supply Management gives some key insight as to what this recovery is looking like.
According to the Institute’s Report on Business for February, manufacturing activity rose to 60.8% during the month, which is the highest percentage in the last three years. The figure was also 2.1% more than January’s 58.7%. Readings of 50% or higher indicate expansion in the sector, and the figure also exceeded the median expert estimate of 58.9%.
While the growth is certainly a good sign, there are some important factors which the ISM believes will be important to keep an eye on. In particular, prices have reached their highest levels in a decade, deliveries from supplies continue to slow, and some commodities are facing what some have seen as an out-of-control shortage. The Prices Index reading of 86% is the highest since July 2008, which had a reading of 90.4%. Aluminum, copper, chemicals, steel, and wood products are some of the leading drivers of the high Index, as are precious metals used in semiconductors and other electronic devices.
High consumer demand will also continue to strain and test supply chains, which many experts believe will not get better until a significant amount of the population is vaccinated. As it stands, most conservative estimates believe this will occur in the third quarter, but others see it as potentially happening in the second quarter. Until then, as demand for many hard-to-get items remains high, manufacturers will need to find a balance in order to keep their supply lines up and running.
For a closer look at what went into the report watch Manufacturing Talk Radio’s Institute for Supply Management®’s Report On Business® Series.