The U.S. manufacturing sector expanded in January, Manufacturing PMI® registered 50.9%, after 26 consecutive months of contraction.
Regarding the overall economy, this figure indicates that the economy continued in expansion for the 57th month after one month of contraction in April 2020. (A manufacturing PMI® above 42.5%, over a period of time, generally indicates an expansion of the overall economy.)
The Employment Index registered 50.3%, up 4.9 percentage points from December’s seasonally adjusted figure of 45.4%. The Prices Index continued in expansion territory, registering 54.9%, up 2.4 percentage points compared to the reading of 52.5%in December. The New Orders Index was in expansion territory for the third month after seven months of contraction, strengthening again to a reading of 55.1%, 3 percentage points higher than the seasonally adjusted 52.1% recorded in December.
The New Export Orders Index reading of 52.4% is 2.4 percentage points higher than the ‘unchanged’ reading of 50% registered in December. The Imports Index returned to expansion in January, registering 51.1%, 1.4 percentage points higher than December’s reading of 49.7%. “The New Export Orders Index reading indicates that export orders grew compared to last month, following six straight months of contraction. New export orders expanded this month, as panelists’ comments support more activity due to Chinese stimulus measures and as Beijing prepares for its own potential counter tariffs,” says Timothy Fiore, Chair of the Institute for Supply Management.
The Imports Index turned upward in January and returned to expansion territory; the reading of 51.1% is 1.4 percentage points higher compared to the reading of 49.7% reported in December. “Imports expanded this month after contracting for seven months in a row, preceded by five consecutive months of expansion and 14 consecutive months of contraction prior to that. Imports re-entered growth as inventory constraints weaken, tariff countermeasures are put in place, a ports strike was avoided and the deliveries from the Lunar New Year season arrive at U.S. ports,” says Fiore.
The Inventories Index registered 45.9%, down 2.5 percentage points compared to December’s seasonally adjusted reading of 48.4%.
Read the ISM release.
