Forest industry performance in January and February was reported by both the US government and the Institute for Supply Management.
Total industrial production (IP) increased 0.9% in January, a greater month-over-month (MoM) rise than expected owing in part to December’s reading being revised lower (from -0.4% to -0.7%). Total IP remained 0.7% below its year-earlier level, however, the third consecutive month of YoY declines. During the past 100 years, the U.S. economy fell into recession 17 out of 19 times when IP contracted for three consecutive months, so January’s IP jump may prove to be too little, too late.
The Institute for Supply Management’s (ISM) monthly opinion survey showed that the contraction in U.S. manufacturing slowed further during February (Figure 2). The PMI increased 1.3 percentage points, to 49.5%. (50% is the breakpoint between contraction and expansion.) Changes to key internal sub-indexes included a pick-up in production, a smaller reduction in employment, slower input price erosion, and contractions in both exports and imports (Table 4).