Economic activity in the manufacturing sector expanded in February, and the overall economy grew for the 118th consecutive month, according to the latest Manufacturing ISM Report on Business.

The report was issued today by Timothy R. Fiore, chair of the Institute for Supply Management Manufacturing Business Survey Committee.

“The February PMI registered 54.2%, an decrease of 2.4 percentage points from the January reading of 56.6%,” said Fiore. “The New Orders Index registered 55.5%, a decrease of 2.7 percentage points from the January reading of 58.2%. The Production Index registered 54.8%, a 5.7 percentage point decrease compared to the January reading of 60.5%. The Employment Index registered 52.3%, a decrease of 3.2 percentage points from the January reading of 55.5%. The Supplier Deliveries Index registered 54.9%, a 1.3 percentage point decrease from the January reading of 56.2%. The Inventories Index registered 53.4%, an increase of 0.6 percentage point from the January reading of 52.8%. The Prices Index registered 49.4%, a 0.2 percentage point decrease from the January reading of 49.6%, indicating lower raw materials prices for the second straight month after nearly three years of increases.

“Comments from the panel reflect continued expanding business strength, supported by notable demand and output, although both were softer than the prior month. Demand expansion continued, with the New Orders Index reaching the mid-50s, the Customers’ Inventories Index scoring lower and remaining too low, and the Backlog of Orders returning to a low-50s expansion level. Consumption (production and employment) continued to expand but fell a combined 8.9 points from the previous month’s levels. Inputs — expressed as supplier deliveries, inventories and imports — stabilized at a mid-50s level and had a slight negative impact on the PMI. Inputs continue to reflect an easing business environment, confirmed by Prices Index contraction.

“Exports continue to expand, at slightly stronger rates compared to January. The manufacturing sector continues to expand, but inputs and prices indicate easing of supply chain constraints.”

Of the 18 manufacturing industries, 16 reported growth in February, in the following order:

• Printing & related support activities
• Textile mills
• Computer & electronic products
• Electrical equipment, appliances & components
• Fabricated metal products
• Paper products
• Wood products
• Primary metals
• Chemical products
• Food, beverage & tobacco products
• Miscellaneous manufacturing
• Petroleum & coal products
• Transportation equipment
• Machinery
• Furniture & related products
• Plastics & rubber products.

The only industry reporting contraction in February was nonmetallic mineral products.