Expansion Continues As Supply-Side Stresses Intensify
Regions Economic Update
March 1, 2021
February is often a quiet month for US industry as harsh winter weather challenges supply-chains. Not this year. The Institute for Supply Management (ISM) Manufacturing Index rose to 60.8 last month, exceeding expectations and showing consistent momentum for the ninth month in a row. “Continued growth in new orders suggests the expansion in the factory sector will be sustained, though labor supply and logistics challenges will continue to weigh on the pace of growth in the near term,” says Rick Moody, Chief Economist at Birmingham-based Regions Bank. Survey results reflect frustrations with workforce shortages and transportation obstacles. “Producers and suppliers are contending with labor supply issues, while at the same time, increased supply chain disruptions, including ports being backed up to the point it is taking weeks to unload ships, are also curbing production,” Moody says.
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