The overall economy grew for the 105th straight time, the Institute for Supply Management reported Thursday.
According to the ISM's monthly report on business, the ISM index decreased to 59.1 in January from 59.3 in December.
Economists polled by IFR Markets predicted the index would be 59.0.
An index reading below 50 signals a slowing economy, while a level above 50 suggests expansion. A reading of 50 shows the sector was unchanged in the month.
The prices paid index increased to 72.7 from 68.3. The employment index fell to 54.2 from 58.1.
The production index slipped to 64.5 from 65.2, the new orders index declined to 65.4 from 67.4; the supplier deliveries index rose to 59.1 from 57.2; the export orders index grew to 59.8 from 57.6; and the imports index rose to 58.4 from 56.5.
The inventories index climbed to 52.3 from 48.5; the customers' inventories index rose to 45.6 from 42.9; and backlog of orders gained to 56.2 from 54.9.
Respondents' comments included:
- "Sales nationally and internationally are strong in Q1. We are increasing our CapEx spend by 30 percent to 40 percent over [the] previous year." (Chemical Products)
- "We have heard reports of additional business due to the recent reduction of tax rates." (Machinery)
- "Business outlook is positive on all fronts right now with our customers. Budgets are being approved for new projects, and component prices from suppliers have temporarily stabilized." (Computer & Electronic Products)
- "Our usual winter slowdown has not occurred, and we are very busy with new orders." (Furniture & Related Products)
- "Slow start to 2018; pricing on metals is heading up and quotes/orders are picking up as well." (Fabricated Metal Products)
- "Overall, business remains steady. With several key programs to begin ramping up in the industry, outlook looks good for calendar year 2018." (Transportation Equipment)
- "Employment is very tight in our area." (Food, Beverage & Tobacco Products)
- "Business continues to strengthen." (Paper Products)
- "Business is starting the new year strong. Consumer confidence seems to be driving a lot of our customers’ order requirements higher." (Plastics & Rubber Products)