ISM: Manufacturing Activity Slows in January
The Institute for Supply Management said its Purchasing Managers Index registered 51.3% in January, a decrease of 5.2 percentage points from December’s seasonally adjusted reading of 56.5%.
The ISM added that economic activity in the manufacturing sector expanded in January for the eighth consecutive month, and the overall economy grew for the 56th consecutive month.
A reading above 50% indicates that the manufacturing economy is generally expanding; below 50% indicates that it is generally contracting.
The New Orders Index registered 51.2%, a significant decrease of 13.2 percentage points from December’s seasonally adjusted reading of 64.4%. The Production Index registered 54.8%, a decrease of 6.9 percentage points compared to December’s seasonally adjusted reading of 61.7%.
Inventories of raw materials decreased by three percentage points to 44%, the lowest reading since December 2012, when the Inventories Index registered 43%. A number of comments from the ISM panel cite adverse weather conditions as a factor negatively impacting their businesses in January, while others reflect optimism and increasing volumes in the early stages of 2014.
Of the 18 manufacturing industries, 11 are reporting growth in January in the following order: Plastics & Rubber Products; Primary Metals; Textile Mills; Wood Products; Printing & Related Support Activities; Fabricated Metal Products; Electrical Equipment, Appliances & Components; Transportation Equipment; Machinery; Furniture & Related Products; and Food, Beverage & Tobacco Products.
The seven industries reporting contraction in January — listed in order — are: Nonmetallic Mineral Products; Petroleum & Coal Products; Apparel, Leather & Allied Products; Miscellaneous Manufacturing; Chemical Products; Paper Products; and Computer & Electronic Products.
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