Economic activity in the manufacturing sector expanded in January, while the overall economy grew for the 75th consecutive month, according to the Institute of Supply Management's latest report.
"The manufacturing sector gained momentum in January as the PMI rose 2.3 percentage points, signaling stronger performance in January when compared to the seasonally adjusted 48.4% recorded in December. This represents a return to the recent trend of slow growth in manufacturing, as the PMI has averaged 50.2% for the past six months. The PMI was driven by the Production Index, which made a rebound of 6.6 percentage points during the month, while the New Orders Index reflected a slight decline at 49.5%," said Norbert J. Ore, C.P.M., of the Institute for Supply Management.
Dan Meckstroth, Chief Economist, Manufacturers Alliance/MAPI points out that the report "shows that manufacturers reduced inventories in the fourth quarter and entered the new year with lean supply shelves. Some inventory rebuilding to slightly boost production was in order due to steep inventory reductions. The big ticket housing and motor vehicles markets, though, are declining and they are softening demand in many intermediate material industries. It is clear that, in this cycle, the manufacturing recession will be concentrated in the consumer goods sector. However, strength in capital goods industries and a broad-based increase in exports should cushion the downturn."