US manufacturing contracts further, rays of light on the horizon

WASHINGTON, Mar 02 (Reuters): US manufacturing slumped further in February, with a measure of factory employment falling to a seven-month low amid layoffs, but there were signs activity was on the cusp of rebounding.
The survey from the Institute for Supply Management on Friday showed customer inventories declining for a third straight month, which the ISM considered as positive for future new orders and production growth. Comments from manufacturers were also upbeat, with some saying "demand has finally picked up," and others noting they were "experiencing increased sales."
"We see some encouraging signs of life in manufacturing," said Shannon Grein, an economist at Wells Fargo in Charlotte, North Carolina.
The ISM said its manufacturing PMI fell to 47.8 last month from 49.1 in January. It was the 16th straight month the PMI remained below 50, which indicates contraction in manufacturing. That is the longest such stretch since the period from August 2000 to January 2002.