Tempe, AZ, February 2--Economic activity in the manufacturing sector grew in January for the 20th consecutive month, while the overall economy grew for the 39th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business.
The report was issued today by Norbert J. Ore, C.P.M., chair of the Institute for Supply Management Manufacturing Business Survey Committee. "January's PMI reflects continuing strength in manufacturing. Production and employment both accelerated during the month. Prices, particularly energy prices, continue to provide a challenge to buyers.
"However, the rate of increase of prices continues to decelerate, raising hopes that price inflation will moderate as the year advances. Inventory growth was significant in January, while supplier deliveries do not appear to be a problem based on a decelerating index. Additionally, only one commodity is listed in short supply."
Comments from respondents this month indicate a number of positives. Stainless steel supply appears to be improving, as shortages are less of an issue. Others mentioned end-of-year issues that require transition to new products or inventory policies. The most optimistic comments came from companies that produce capital goods, as they see that market continuing to experience strong demand both domestically and internationally.
ISM's PMI registered 56.4 percent in January, a decrease of 0.9 percentage point when compared to 57.3 percent in December. ISM's New Orders Index declined 6.1 percentage points from 62.6 percent in December to 56.5 percent in January. ISM's Production Index increased 1.1 percentage points from 56.7 percent in December to 57.8 percent in January. The ISM Employment Index is at 58.1 percent in January, an increase of 4.8 percentage points when compared to the 53.3 percent reported in December.
ISM's Supplier Deliveries Index registered 53.7 percent, 2.4 percentage points lower than December's 56.1 percent. ISM's Inventories Index registered 52.8 percent in January, the same as reported in December. ISM's Customers' Inventories Index for January is at 44.5 percent, up from 44 percent in December. ISM's Prices Index in January is 69 percent, 3 percentage points lower than the 72 percent reported in December.
ISM's Backlog of Orders Index for January declined 3.5 percentage points to 50.5 percent from 54 percent registered in December. ISM's New Export Orders Index registered 56.9 percent, a decrease of 2.2 percentage points from December's 59.1 percent. ISM's Imports Index increased 0.3 percentage point to 61.1 percent in January, up from 60.8 percent in December.
"January sets the tone for a strong first quarter. Even though the PMI is slightly lower, the month-over-month growth is still quite strong and will provide significant momentum for the remainder of Q1. Demand for exports continues to be quite strong, with a number of industries reporting significant growth. Inventories have now increased during seven of the last eight months, but still do not appear to be a problem as manufacturers' customers' inventories appear to still be too low," said Ore.
In January, 12 industries reported growth: Primary Metals; Furniture; Rubber & Plastic Products; Transportation & Equipment; Industrial & Commercial Equipment & Computers; Instruments & Photographic Equipment; Miscellaneous; Textiles; Chemicals; Electronic Components & Equipment; Apparel; and Food.
"Adhesives; Aluminum; Aluminum Products; Butadiene; Caustic Soda; Chemicals; Copper; Corrugated Containers; Diesel Fuel; Freight; High-Density Polyethylene Resins; MRO Items; Natural Gas (also reported down in price); Paper; Petroleum Products; Plastic Products; Plastics; Polyethylene; Polyethylene Film; Polypropylene Resins; PVC Products; Resins; Specialty Chemicals; Stainless Steel; Steel; Steel Products; Titanium Dioxide; and Vinyls are the commodities reported up in price.
