US: Expect a sixth consecutive increase in the ISM manufacturing index in February – BMO CM
|Research Team at BMO Capital Markets explains that after hitting a sub-50 reading in August (and in 6 of the 11 months ending then), the US ISM manufacturing index has increased for five straight months to the highest level (56) since November 2014.
Key Quotes
“This five-month pace of improvement has not been seen since 2009, when the economic recovery was just beginning. There are three major reasons for the rebound. First, exporters and domestic firms competing against imports have had time to adjust to a strong U.S. dollar as the pace of appreciation has slowed. Second, firmer oil prices are lifting domestic crude oil production. Third, after contracting for more than a year, investment in machinery is recovering, aided by the post-election surge in business confidence. We should see a sixth consecutive increase in the ISM index in February, as the regional indices from the NY, Philly and KC Feds all jumped in the month.”
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