InvestorQ : Is the PMI Manufacturing for the month of February still showing growth?
vidhya Laxmi made post

Is the PMI Manufacturing for the month of February still showing growth?

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sarah Leo answered.
1 month ago
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The PMI Manufacturing is a high frequency indicator that measures the momentum of manufacturing on a monthly basis. There was a slight tapering in the PMI manufacturing for the month of February 2021 as it eased from 57.7 in January to 57.5 in February. This is at best indicative of a slight loss in momentum and not much else.

However, the real cut-off for the PMI from an analytical standpoint is the level of 50. PMI below 50 hints at economic contraction in manufacturing while PMI being above 50 indicates that the industrial expansion is still the theme. In cases like Feb 2021, it can be said that some momentum may have been lost compared to the previous months. But it is more instructive to look at the components of PMI Manufacturing in this case.

On the positive side, the headline PMI Manufacturing for Feb-21 remained above the long-run median average of 53.6. In terms of specific components of PMI Manufacturing, the parameters like output, purchases and inventories were growing but job creation continued to fall consistently and that keeps job creation under pressure. Additionally, the rising prices of raw materials and other inputs are also exerting upward pressure on costs.

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