US manufacturing activity contracted for the fifth straight month in February, although many sectors reported good demand domestically, the Institute for Supply Management reported Tuesday.
The ISM purchasing managers index for the manufacturing sector registered 49.5, below the threshold of 50 between growth and contraction.
That however was better that January's level of 48.2, and the best since September. A year ago the ISM's PMI for manufacturing was 52.3.
Seven of the 18 industries surveyed reported business was worse, with the crunch in the oil and gas industry responsible for much of the drag.
But also reporting business was shrinking were the apparel, electronics, transportation equipment and printing sectors.
Overall for the 18 industries, new orders and production picked up in February, but employment continued to shrink, prices fell and inventories fell.
Survey respondents pointed to the effects of the global slowdown and strong dollar on international business, but in many areas said domestic business was strong.
"US business demand is solid; international demand is soft," said a respondent from the chemical products industry.
"Business has to get better. And it appears it is," said a person from the fabricated metal products sector.
The ISM said the data showed the economy is still growing despite the index's indicated contraction in manufacturing.
Comments "indicate a more positive view of demand than in January, as 12 of our 18 industries report an increase in new orders," said Bradley Holcomb, who leads the ISM Manufacturing Business Survey Committee.