WASHINGTON (AP) -- The Institute for Supply Management reports on U.S. manufacturing activity in February. The ISM, a trade group of purchasing managers, will release its manufacturing index at 10:00 a.m. Eastern time Monday.
TINY INCREASE: Economists forecast that the index rose to 51.5 in February, according to a survey by FactSet, from 51.3 in January. Any reading above 50 indicates growth.
The index plummeted in January from 56.5 in December, a drop that ISM executives blamed partly on the weather. A measure of new orders plunged and gauges of production and employment also fell.
MANUFACTURING SLOWDOWN: Last year, U.S. factories were cranking out appliances, autos and other goods at a healthy pace until harsh winter weather descended. The ISM's index rose for six straight months until dipping slightly in December. That was followed by January's sharp fall, as heavy snow caused factories to close and delayed shipments of raw materials.
Still, economists expect that manufacturing output will pick up once temperatures rise. February's ISM report may give some indication of whether that is happening.
Auto and home sales slumped in January as fewer Americans ventured outdoors to take a test drive or check out homes for sale. Car sales slipped 3 percent, while sales of existing homes plunged to their lowest level in 18 months.
As a result, factories cut back on the production of autos, furniture and appliances. Factory output dropped sharply in January, according to the Federal Reserve. Auto production collapsed 5.1 percent, as many plants closed.
Cold weather continued into February but temperatures improved toward the end of the month. That's why some economists expect to see an uptick in the ISM index.
Still, businesses remain cautious about ordering more machinery, metal parts and computers. Orders for durable goods fell for the second straight month in January, the government said Thursday. Durable goods are those meant to last at least three years.
But core capital goods — which exclude defense goods and aircraft — rose, a sign that businesses stepped up investment. But the increase came after a slightly larger decline in December.
- Consumer Discretionary