U.S. Factory Activity Continued to Expand in February — ISM

By Jessica Coacci

U.S. factory activity expanded in February for the second straight month as new orders and production continued to grow, a survey of manufacturing firms said.

The Institute for Supply Management said Monday that its purchasing managers' index of manufacturing activity was 52.4 in February compared with 52.6 in January. A consensus of economists polled by The Wall Street Journal expected a reading of 52.0.

A reading above 50 points to expansion in activity in the sector, though one above 47.5, over a period of time, generally indicates an expansion of the overall economy.

The index for new orders expanded for the second straight month after four straight readings in contraction, but was down slightly from January's figure. The production index also expanded at a slower pace than January. The backlog of orders registered its highest reading since May 2022.

"In February, U.S. manufacturing activity remained in expansion territory, although growing at a slower pace than the month before," said Susan Spence, chair of the ISM Manufacturing Business Survey Committee.

The employment and inventories indexes remained in contraction, the survey said.

"Of the six largest manufacturing industries, four (Chemical Products; Machinery; Transportation Equipment; and Computer and Electronic Products) expanded in February," Spence said.

Meanwhile, the prices index remained in expansion, its highest reading since June 2022. This could add to concerns at the Federal Reserve over further easing of interest rates this year.

Higher prices were reported by more than 45% of respondents in February, up 16.4 percentage points from January.

"Due to the tariffs, most raw materials used in manufacturing, such as steel and wire, need to be sourced domestically, and the cost keeps going up," said a respondent.

Write to Jessica Coacci at jessica.coacci@wsj.com

(END) Dow Jones Newswires

March 02, 2026 10:43 ET (15:43 GMT)