Manufacturing Sector Grows with the Overall Economy in January

The ISM Manufacturing Index registered 50.9 points in January of 2020, an increase of 3.1 percentage points from the previous month, according to the Institute for Supply Management. Readings above 50 points denote expansion. Of the eighteen manufacturing industries, eight reported growth in December, in the following order: Furniture & Related Products; Wood Products; Food, Beverage & Tobacco Products; Computer & Electronic Products; Miscellaneous Manufacturing; Nonmetallic Mineral Products; Chemical Products; and Fabricated Metal Products. The eight industries reporting contraction in January — in the following order — are: Printing & Related Support Activities; Apparel, Leather & Allied Products; Electrical Equipment, Appliances & Components; Petroleum & Coal Products; Textile Mills; Transportation Equipment; Primary Metals; and Machinery.

The Employment Index registered 46.6 percent, an increase of 1.4 percentage points from the December reading of 45.2 percent. This indicates contraction in January for the sixth month in a row. Of eighteen manufacturing industries, four reported employment growth in January. Ten industries reported a decrease in employment.

The New Orders Index registered 52 percent in January, an increase of 4.4 percentage point from the December reading of 47.8 percent. This indicates that new orders expanded for the first month after 5 months of contraction. Ten industries reported expansion, while five reported a decrease in new orders.

The New Export Orders Index registered 53.3 percent in January, a robust increase of 6 percentage points from the December reading of 47.3 percent, indicating that new export orders expanded, reporting their best performance since September of 2018.

The Inventories Index registered 48.8 percent in January, a decrease of 0.4 percentage points from the December reading of 49.2 percent. This indicates that inventories contracted for the eighth consecutive month.

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