January 2021 Manufacturing ISM Report On Business Reports Manufacturing Still Growing

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, with the overall economy notching an eighth consecutive month of growth, say the nation's supply executives in the latest Manufacturing ISM Report On Business.

Manufacturing grew in January, as the Manufacturing PMI registered 58.7 percent, 1.8 percentage points lower than the seasonally adjusted December reading of 60.5 percent.  The Manufacturing PMI continued to indicate strong sector expansion and U.S. economic growth in January.

ISM’s New Orders Index registered 61.1 percent in January, a decrease of 6.4 percentage points compared to the seasonally adjusted 67.5 percent reported in December.  This indicates that new orders grew for the eighth consecutive month.

The Production Index registered 60.7 percent in January, 4 percentage points lower than the seasonally adjusted December reading of 64.7 percent, indicating growth for the eighth consecutive month.

ISM’s Employment Index registered 52.6 percent in January, 0.9 percentage point higher than the seasonally adjusted December reading of 51.7 percent.  The Employment Index grew for the second month in a row with only one (Chemical Products) of the six big industry sectors expanding.

The delivery performance of suppliers to manufacturing organizations was slower in January, as the Supplier Deliveries Index registered 68.2 percent.  This is 0.5 percentage point higher than the 67.7 percent reported in December.

The Inventories Index registered 50.8 percent in January, 0.2 percentage point lower than the seasonally adjusted 51 percent reported for December.  Inventories grew for a fourth consecutive month after three months of contraction.

ISM’s Backlog of Orders Index registered 59.7 percent in January, a 0.6-percentage point increase compared to the 59.1 percent reported in December, indicating order backlogs expanded for the seventh consecutive month.

Of the 18 manufacturing industries, 16 reported growth in January, in the following order: Electrical Equipment, Appliances & Components; Machinery; Primary Metals; Chemical Products; Fabricated Metal Products; Plastics & Rubber Products; Transportation Equipment; Apparel, Leather & Allied Products; Paper Products; Wood Products; Food, Beverage & Tobacco Products; Nonmetallic Mineral Products; Furniture & Related Products; Miscellaneous Manufacturing; Textile Mills; and Computer & Electronic Products.  The two industries reporting contraction in January are: Printing & Related Support Activities; and Petroleum & Coal Products.