Today's release of the ISM Manufacturing report for February came in stronger than expected (54.2 vs 52.5) and was the highest monthly reading since June 2011. As shown in the table below, not only did the headline index improve, but seven out of ten subcomponents increased relative to last month, while all but one of the subcomponents were either flat to up relative to last year.
The biggest area of strength this month was in Backlog Orders which rose 7.5 points. Other components seeing sharp increases on the month were Prices Paid, New Orders, Production, and Imports. On the downside, Supplier Deliveries, Customer Inventories, and Employment were the only components that declined. Relative to last year, Export Orders was the only component that declined indicating that global economic weakness is acting as a drag on US manufacturing. On a positive note, Production, New Orders, and Backlog Orders all saw some of the largest increases compared to last year.