Manufacturing Expands for Sixth Consecutive Month in January

Economic activity in the manufacturing sector expanded in January for the sixth consecutive month, and the overall economy grew for the ninth consecutive month, according to the latest Manufacturing ISM Report on Business. The report, issued by the Institute for Supply Management each month, showed the PMI rose to 58.4%, its highest level since August 2004. A reading above 50% indicates expansion.

Both the New Orders and Production indexes were above 60% for the industry. Inventories continued to contract, albeit at a slower rate than previous months. The Inventories Index for January was at 46.5%.

The ISM Customers' Inventories Index registered 32% in January, 3 percentage points lower than in December when the index registered 35%, and the lowest reading in the history of the index. The index indicates that respondents believe their customers' inventories are too low at this time. This is the tenth consecutive month the Customers' Inventories Index has been below 50 percent.

The 13 manufacturing industries reporting growth in January are: Apparel, Leather & Allied Products; Textile Mills; Machinery; Miscellaneous Manufacturing; Transportation Equipment; Paper Products; Nonmetallic Mineral Products; Computer & Electronic Products; Food, Beverage & Tobacco Products; Electrical Equipment, Appliances & Components; Wood Products; Fabricated Metal Products; and Plastics & Rubber Products. Furniture & Related Products is the only industry reporting contraction in January.