Although the manufacturing sector of the U.S. economy grew for the thirty-second consecutive month in January, the pace was nearly a percentage point slower than in December 2005, according to data released Feb. 1 by the Institute for Supply Management (ISM), Tempe, Ariz.
The group's manufacturing activity index was at 54.8% in January, eight-tenths of a percent below December's 55.6%. A figure above 50% indicates the manufacturing sector generally is expanding; a figure below 50% signals the manufacturing is contracting.
As with the overall index, three key components -- new orders, production, and employment -- all continued to grow in January, though more slowly than in December. New orders in January were at an index value of 58% in January, down 1.1 percentage points from December's 59.1%. The production index was at 56.6% in January, down 1.2 percentage points from December's 57.8%. The employment index was at 51.3% in January, down 2.3 percentage points from December's 53.6%.
The prices manufacturers pay for materials was up two percentage points to an index value of 65% in January, but the list of commodities that purchasing and supply executives reported to be "up in price" was "significantly reduced" from December, says Norbert J. Ore, chair of ISM manufacturing business survey committee.
