Economic activity in the manufacturing sector improved in January, and the overall economy grew for the eighth consecutive month — after it had dipped significantly in the early stages of the coronavirus — according to the nation’s supply executives in the latest Manufacturing ISM Report on Business.
The January Manufacturing PMI registered 58.7%, down 1.8% from the seasonally adjusted December reading of 60.5%. This figure indicates expansion in the overall economy for the eighth month in a row after contraction in March, April, and May. The New Orders Index registered 61.1%, down 6.4% from the seasonally adjusted December reading of 67.5%. The Production Index registered 60.7%, a decrease of 4% compared to the seasonally adjusted December reading of 64.7%. The Backlog of Orders Index registered 59.7%, 0.6% above the December reading of 59.1%. The Employment Index registered 52.6%, 0.9% higher from the seasonally adjusted December reading of 51.7%. The Supplier Deliveries Index registered 68.2%, up 0.5% from the December figure of 67.7%.
The Inventories Index registered 50.8%, 0.2% lower than the seasonally adjusted December reading of 51%. The Prices Index registered 82.1%, up 4.5% compared to the December reading of 77.6%. The New Export Orders Index registered 54.9%, a decrease of 2.6% compared to the December reading of 57.5%. The Imports Index registered 56.8%, a 2.2% increase from the December reading of 54.6%.
“The manufacturing economy continued its recovery in January,” said Timothy R. Fiore, chair of the Institute for Supply Management Manufacturing Business Survey Committee. “Survey committee members reported that their companies and suppliers continue to operate in reconfigured factories, but absenteeism, short-term shutdowns to sanitize facilities and difficulties in returning and hiring workers are continuing to cause strains that limit manufacturing growth potential. However, panel sentiment remains optimistic (three positive comments for every cautious comment), similar to December levels.
Of the 18 manufacturing industries, 16 reported growth in January, in the following order: Electrical Equipment, Appliances & Components; Machinery; Primary Metals; Chemical Products; Fabricated Metal Products; Plastics & Rubber Products; Transportation Equipment; Apparel, Leather & Allied Products; Paper Products; Wood Products; Food, Beverage & Tobacco Products; Nonmetallic Mineral Products; Furniture & Related Products; Miscellaneous Manufacturing; Textile Mills; and Computer & Electronic Products. The two industries reporting contraction in January are: Printing & Related Support Activities; and Petroleum & Coal Products.