ISM MFG reading should improve in February, says market experts

02.29.2012


Various market experts have predicted that the ISM's manufacturing reading will rise in February.
Various market experts have predicted that the ISM's manufacturing reading will rise in February.

Various market experts have predicted that the Institute for Supply Management (ISM)'s February manufacturing index will increase from its January level, and this rising activity could translate to staffing in the industry.

Reuters reports that the U.S. manufacturing sector has been bolstered by strong demand for equipment from foreign companies and high demand for automobiles, according to Reuters. The industry has also been helped by the weak U.S. dollar, which makes goods produced in the United States cheaper to buyers using foreign currencies. Manufacturing has contributed to job growth in an economy that has been undermined by a real estate recession and the financial crisis.

The median forecast provided by market experts polled by Reuters was for the monthly ISM reading to increase to 54.5 from January's figure of 54.1.

Zacks reports that the market generally expects the ISM reading to increase for the month, and that an increase will mean a fourth consecutive month of improvement in the figure.

Economists from investment bank Goldman Sachs stated in a research note that they increased their prediction for the monthly reading to 55.0 from their previous estimate of 54.0 , according to Reuters.

The Chicago branch of the ISM stated that its regional measure of business activity rose to 64.0 in February, the media outlet reports. This gain was larger than expected, and caused the metric to be at its highest point since March 2011. This local index is relevant because the area derives much of its business from manufacturing.

The ISM plans to issue its February manufacturing data at 10 a.m. (15:00 GMT) on Thursday, March 1.

Evidence of this improving manufacturing activity can be seen in Memphis, Tennessee, where Kruger Products LP, parent company of KTG USA, has stated that it plans on investing $316 million into an expansion and staffing 100 positions.

Kruger produces paper towels, bathroom tissues and facial tissues. The company makes the White Cloud tissue product line for the United States and the White Swan, Cashmere, Scotties, Purex and SpongeTowels, Memphis Business Journal reports.

The Canada-based tissue maker currently has 394 workers at its Memphis location, which serves as its only manufacturing facility, according to the media outlet.

The company plans to construct an additional building at 400 Mahannah Ave., which is where its current manufacturing facility exists, the news source reports. The firm will also purchase new machinery for the expansion plans. The company expects to finish expanding the site in 2013.

Kruger plans to hire people for roles including maintenance, manufacturing and converting, and the company expects to pay as low as $16 and as high as $27 per hour for these positions, the media outlet reports.

The tissue maker has stated that it is accepting applications at its website, and has announced that it is hiring for positions including mechanical maintenance technician, converting technician, paper machine technician and E/I maintenance technician. The company currently has 2,400 employees at its five locations.

"As we embrace a new era of growth, we need employees who value customers, who have the dedication and loyalty that are a hallmark of our work force, and who want an opportunity to grow and succeed with us," Bob Nelson, expansion operations manager for KTG USA, said in a statement.

The staffing plans of this company will serve to boost the jobs market in Tennessee, which currently has an unemployment rate of 8.7 percent. The southern state has a jobless rate higher than the national average of 8.3 percent.