Although growth in the U.S. manufacturing sector in January wasn’t as robust as in prior periods, the nation’s leading index – the PMI -- has expanded for the eighth consecutive month, according to the Institute of Supply Management.
The January PMI registered 51.3 percent, a decrease of 5.2 percentage points from December’s seasonally adjusted reading of 56.5 percent, according to Bradley J. Holcomb, chair of the Institute for Supply Management Manufacturing Business Survey Committee. Any number above 50 percent indicates growth in the industry; any number below 50 indicates contraction.
The new orders index registered 51.2 percent, a significant decrease of 13.2 percentage points from December’s seasonally adjusted reading of 64.4 percent. The production index registered 54.8 percent, a decrease of 6.9 percentage points compared to December’s seasonally adjusted reading of 61.7 percent. Inventories of raw materials decreased by 3 percentage points to 44 percent, its lowest reading since December 2012 when the Inventories Index registered 43 percent. A number of comments from the 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. In computer and electronics products, respondents reported slight improvements in defense business, but the market was still lagging from previous years.
Of the 18 manufacturing industries tracked by the ISM, 11 are reporting growth in January in the following order: plastics and rubber products; primary metals; textile mills; wood products; printing and related support activities; fabricated metal products; electrical equipment, appliances and components; transportation equipment; machinery; furniture and related products; and food, beverage and tobacco products. The seven industries reporting contraction in January — listed in order — are: nonmetallic mineral products; petroleum and coal products; apparel, leather and allied products; miscellaneous manufacturing; chemical products; paper products; and computer and electronic products.
WHAT RESPONDENTS ARE SAYING …
- “We are seeing slight improvements, year-over-year, month-to-month, across most regions and business segments.” (Apparel, Leather and Allied Products)
- “Poor weather impacted outbound and inbound shipments.” (Fabricated Metal Products)
- “Good finish to 2013, but slow start to 2014, mostly attributed to weather.” (Petroleum and Coal Products)
- “U.S. government aerospace business is very brisk.” (Transportation Equipment)
- “Slight improvements in defense business. But still lagging from previous years.” (Computer and Electronic Products)
- “Cautiously optimistic about increasing volumes but still challenging, and margins remain low.” (Chemical Products)
- “We have experienced many late deliveries during the past week due to the weather shutting down truck lines.” (Plastics and Rubber Products)
- “We continue to be busy, working six days, 24 hours a day.” (Primary Metals)
- “Restricted optimism heading into Q1.” (Machinery)
- “Delays in government product certification due to the partial government shutdown last year are still negatively impacting delivery and inventory levels.” (Miscellaneous Manufacturing)
The full report is available at http://www.ism.ws/.