January 2020 Manufacturing ISM Report On Business Reports Manufacturing Expanded after Contracting for Five Straight Months

By Steve Clouther

Category:
Industry Trends

The Manufacturing ISM Report On Business is published monthly by the Institute for Supply Management (ISM), the largest supply management organization in the world, as well as one of the most respected.  Economic activity in the manufacturing sector grew in January, and the overall economy grew for the 129th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business.

Manufacturing expanded in January after contracting for five straight months, as the PMI registered 50.9 percent, an increase of 3.1 percentage points from the seasonally adjusted December reading of 47.8 percent.

ISM’s New Orders Index registered 52 percent in January, an increase of 4.4 percentage points when compared to the seasonally adjusted 47.6 percent reported for December.  This indicates that new orders grew for the first month after contracting for five straight months.

ISM’s Production Index registered 54.3 percent in January, which is 9.5 percentage points higher than the seasonally adjusted 44.8 percent reported for December, registering one month of growth after five consecutive months of contraction.

ISM’s Employment Index registered 46.6 percent in January, an increase of 1.4 percentage points compared to the seasonally adjusted December reading of 45.2 percent.  This is the sixth month of employment contraction, but at a slower rate compared to December.

The delivery performance of suppliers to manufacturing organizations was slower in January, as the Supplier Deliveries Index registered 52.9 percent.  This is 0.7 percentage point higher than the 52.2 percent reported for December.

The Inventories Index registered 48.8 percent in January, a decrease of 0.4 percentage point from the seasonally adjusted 49.2 percent reported for December.  The index contracted for the eighth straight month at a faster rate.

ISM’s Backlog of Orders Index registered 45.7 percent in January, which is 2.4 percentage points higher than the 43.3 percent reported in December, indicating order backlogs contracted for the ninth consecutive month, at a slower rate in January.

Of the 18 manufacturing industries, eight reported growth in January — listed in order — are: Furniture & Related Products; Wood Products; Food, Beverage & Tobacco Products; Computer & Electronic Products; Miscellaneous Manufacturing; Nonmetallic Mineral Products; Chemical Products; and Fabricated Metal Products.  The eight industries reporting contraction in January — listed in order — are: Printing & Related Support Activities; Apparel, Leather & Allied Products; Electrical Equipment, Appliances & Components; Petroleum & Coal Products; Textile Mills; Transportation Equipment; Primary Metals; and Machinery.

 

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