Serious Evidence of Developing Price Inflation

The ISM Prices Index registered 61.5 percent in February, 6 percentage points higher than the 55.5 percent reported in January. This is the second consecutive month this index has reflected an increase in the price of raw materials.

Notice the percent of industries reporting higher prices is steadily climbing, while the percent reporting lower prices is declining dramatically.

Prices	% Higher	% Same	% Lower	Net	Index
Feb 2012	31	61	8	+23	61.5
Jan 2012	30	51	19	+11	55.5
Dec 2011	21	53	26	-5	47.5
Nov 2011	19	52	29	-10	45.0

Thirteen industries report paying increased prices during the month of February in the following order:

Nonmetallic Mineral Products;
Fabricated Metal Products;
Plastics & Rubber Products;
Primary Metals; Machinery;
Chemical Products;
Miscellaneous Manufacturing;
Printing & Related  Support Activities;
Furniture & Related Products;
Electrical Equipment, Appliances & Components; Transportation Equipment;
Computer & Electronic Products;
Food, Beverage & Tobacco Products.

 The only industry reporting paying lower prices on average during the month of February is Paper Products.

As far as specific commodities, Commodities reported up in price were

Aluminum Products; Caustic Soda; Copper Products; Ethylene; Forgings; #2 Fuel Oil; HDPE Products; Plastic Resins; Polypropylene; Propylene; Stainless Steel; Steel ; Steel Bar; Steel — Cold Rolled; Steel — Hot Rolled; Scrap Metal; and Titanium Dioxide.

Commodities Down in Price

Natural Gas is the only commodity reported down in price

The Manufacturing ISM Report On Business® is based on data compiled from purchasing and supply executives nationwide. Membership of the Manufacturing Business Survey Committee is diversified by NAICS, based on each industry's contribution to gross domestic product (GDP). Manufacturing Business Survey Committee responses are divided into the following NAICS code categories: Food, Beverage & Tobacco Products; Textile Mills; Apparel, Leather & Allied Products; Wood Products; Paper Products; Printing & Related Support Activities; Petroleum & Coal Products; Chemical Products; Plastics & Rubber Products; Nonmetallic Mineral Products; Primary Metals; Fabricated Metal Products; Machinery; Computer & Electronic Products; Electrical Equipment, Appliances & Components; Transportation Equipment; Furniture & Related Products; and Miscellaneous Manufacturing (products such as medical equipment and supplies, jewelry, sporting goods, toys and office supplies).