Manufacturing Industry Continues to Contract

The ISM Manufacturing index rose to 48.2 points in January – up 0.2 points from December’s seasonally adjusted reading of 48.0. January’s reading marks the third consecutive monthly decline in the manufacturing sector, as readings below 50 indicate contraction in the manufacturing industry. Of the eighteen industries, eight reported expansion, while ten reported contraction. Business sentiment was mixed as some respondents reported strong sales, while others reported slowing activity.

The Employment Index fell 2.1 points from December to 45.9, indicating a decline in employment growth. Four industries reported growth, while ten, including petroleum and coal, apparel, chemical products, and primary metals reported contractions.

The index for new orders rose 2.7 points to 51.5, indicating growth in new orders after two consecutive months of decline. Eight industries reported new growth, while seven reported decreases.

Export orders fell 4 points to 47.0, after increasing in December. Wood products, furniture, primary metals, and chemical products reported increases, while twelve other categories reported declines.

Inventories registered 43.5 points, indicating that raw materials inventories contracted for the seventh consecutive month.

The price index registered 33.5, unchanged from December, but indicating a decrease in raw materials prices for the 15th consecutive month.

Read the ISM release.