According to the latest Manufacturing ISM Report on Business, economic activity in the manufacturing sector expanded in January, and the overall economy grew for the 117th consecutive month.
Timothy R. Fiore, chair of the ISM Manufacturing Business Survey Committee, commented, “The January PMI registered 56.6%, an increase of 2.3 percentage points from the December reading of 54.3%. The New Orders Index registered 58.2%, an increase of 6.9%age points from the December reading of 51.3%. The Production Index registered 60.5%, 6.4 percentage point increase compared to the December reading of 54.1%. The Employment Index registered 55.5%, a decrease of 0.5%age point from the December reading of 56%. The Supplier Deliveries Index registered 56.2%, a 2.8%age point decrease from the December reading of 59%. The Inventories Index registered 52.8%, an increase of 1.6 percentage points from the December reading of 51.2%. The Prices Index registered 49.6%, a 5.3-percentage point decrease from the December reading of 54.9%, indicating lower raw materials prices for the first time in nearly three years.
“Comments from the panel reflect continued expanding business strength, supported by strong demand and output. Demand expansion improved with the New Orders Index reading returning to the high 50s, the Customers’ Inventories Index remaining too low, and the Backlog of Orders remaining at a near-zero-expansion level. Consumption continued to strengthen, with production expanding strongly and employment continuing to expand at previous-month levels. Inputs — expressed as supplier deliveries, inventories and imports — continued to improve, but are negative to PMI® expansion. Inputs reflect an easing business environment, confirmed by Prices Index contraction.
Of the 18 manufacturing industries, 14 reported growth in January, in the following order:
The only industry reporting contraction in January was nonmetallic mineral products.
Additionally, ISM’s Employment Index registered 55.5% in January, a small decrease when compared to the December reading of 56%. This indicates growth in employment in January for the 28th consecutive month.
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