U.S. ISM Manufacturing PMI Increases in January
by:Tom Moeller
|in:Economy in Brief
Summary
- Index is highest since October 2022.
- Most components improve.
- Price index surges.
The Purchasing Managers Index of activity in the manufacturing sector improved to 49.1 in January, after rising in December to 47.1 from 46.6, according to the Institute for Supply Management. Earlier figures were slightly revised. Remaining below 50, the index has indicated contraction in U.S. manufacturing sector activity since November 2022. The index peaked at 64.0 in March 2021. A January reading of 47.3 had been expected in the Action Economics Forecast Survey.
Movement amongst the component series was mixed last month. The new orders measure jumped to 52.5 from 47.0 in December. It was the highest level since May 2022. Twenty percent (NSA) of survey participants reported increased orders while 23.5% reported decline. The production index improved to 50.4 from 49.9. It remained below the recent high of 51.9 in September. Eighteen percent of respondents reported higher production while 23.8% indicated decline. The supplier delivery reading of 49.1 compared to 47.0 In December. Ten percent of respondents reported slower delivery speeds while twelve percent reported quickening. The inventories index rose to 46.2, its highest level since April of last year.
Edging lower, the employment index eased to 47.1 in January from 47.5 in December. It remained below a high of 50.9 in September. Eleven percent (NSA) of survey participants reported higher employment while 18.4% reported decline.
The prices index jumped to 52.9 (NSA) last month from 45.2 in December. It was the highest level since April of 2023 and the first above the break-even point of 50 since April. The index peaked at 92.1 in June 2021 and averaged 46.6 last year versus 64.8 in 2022. Twenty percent of respondents reported higher prices last month while 14% reported price declines.
In other series, the export order index fell sharply to 45.2 in January after rising to 49.9 in December. It remained below the most recent high of 57.1 in February 2022. The imports series increased to 50.1, its highest level since October 2022. After rising sharply to 45.3 in December, the order backlog index eased to 44.7 last month.
The ISM figures are based on responses from over 400 purchasing executives from 20 industries, which correspond to their contribution to GDP in 50 states.
These data are diffusion indexes where a reading above 50 indicates expansion. The figures from the Institute for Supply Management can be found in Haver's USECON database; further detail is found in the SURVEYS database. The expectations number is available in Haver's AS1REPNA database.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
More Economy in Brief
